Casimir Capital

Casimir is a small investment bank that seems to underwrite a lot of junk (like Roth Capital, Rodman and Renshaw, etc.).  I am currently trying to go through all of the stocks they have underwritten recently for potential shorts.  I’ve compiled a list of these stocks as a Google document with borrow costs from IB.

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Order execution traps

This is a follow-up post to “Are stock prices random?  A look at market structure“.  Here is a list of some order execution traps.

Are stock prices random? A look at market structure

Just look at the highly manipulated chart below:

NXTH was a pump and dump scam.  I don’t know how insiders did it but the stock price was highly manipulated, as you can see by the chart above.  The idea was probably to sucker investors/gamblers into a stock that constantly goes up in a straight line.

How to bury material information if you’re a junior miner

1. Bury it in the middle of a press release about something else.
2. Reveal material information in a quarterly (not annual) MD&A, because most people don’t read ’em.
3. Simply choose not to release it.  This is probably illegal and may be considered illegal if lawyers sue company insiders.  However, some juniors have directors’ & officers’ insurance that may protect insiders against some of these claims.  NI 43-101 has reduced some of these abuses as companies now have to reveal more technical data about its properties.  The technical reports often contain information about metallurgical problems with a deposit; few companies will mention these metallurgical problems elsewhere so it can be worth reading the technical reports for yourself.  Title issues are often not revealed at all; there is no legal equivalent of a NI 43-101 report.
4. Announce delays to releasing the information (e.g. lame excuses for why a feasibility study isn’t ready or why the scope has changed) until everybody hopefully forgets about it.  Also, make sure that negative information is released after a private placement.  Private placement investors are supposed to be sophisticated so in a courtroom you can argue that it’s their fault that they didn’t do their due diligence.
5. Instead of announcing that your deposit is worthless in a material change report or press release, just quietly write the property down to 0 in your quarterly or annual filing.

If you blow up enough shareholder capital, eventually they won’t have anymore capital to give you.  So learn from all those part-time CEOs on the TSX Venture Exchange.  If one of their promotions blow up, they still have a few others that will pay them six-figure salaries.  It’s not like shareholders degenerate gamblers are smart enough to figure out that every unnecessary company comes with six figures worth of unnecessary listing fees, transfer agent fees, legal fees, audit fees, and directors’ salaries.  The part-time CEOs understand that they are in the business of mining… the stock markets.

The short selling playbook

This post is about the most common reasons why I think short sellers decide to target a stock.

Do I recommend short selling common stock? No!

This blog has many short ideas involving shorting the common stock of a company.  I don’t actually think that short selling common stock is a good idea.  There are many ways to lose even if you’re right.

NQ Mobile: Their actions don’t make sense for a legitimate company

Muddy Waters has accused NQ of being a fraud and falsifying its cash balances.  NQ has waged a campaign to defend itself, issuing multiple press releases and holding a 2-hour conference call with investors.  What doesn’t make sense is the steps that NQ is willing to go to “prove” that its cash is real.  It has transferred a little over $100 million into its account at Standard Chartered Bank, giving up interest on its term deposits to do so.  What kind of sane business manager would do this?  At best, the CEO is an idiot for throwing away free money.