Tuesday, February 16, 2010

Safety in Numbers

A man who identifies himself as the general counsel for basketball great Shaquille O'Neal has sent a "cease and desist" letter to a fellow resident of this not-really-a-place we call the econoblogosphere.

The lawyer is Dennis A. Roach and the recipient of his nastygram isTim Sykes.

I'm not a big fan of Sykes' blog. He's a self-promoting penny-stocks guru who was featured in a program called Wall Street Warriors back in the day. He came to my attention only because they had some fun with him over at Dealbreaker which, as you known I follow religiously.

Anyway, this isn't about fandom. Its about an effort to censor an internet blowhard. We can't let that happen. So, let me be plain: Sykes has been saying unflattering things about a stock called NXT Nutritionals Holdings Inc., with stock symbol NXTH. Shaq has become a spokesman for NXTH, and thus has put himself in the line of fire.

Sykes has said things like this:

By the end of 2012, regulatory filings show, NXTH must give O’Neal 3 million shares of company stock in exchange for his publicity services. He was scheduled to receive the first 1 million shares back in November, filings show, and can start selling them at the beginning of February. At that point, he will be free to sell up to 20,000 NXTH shares a day (but no more than 100,000 shares a month) if he chooses to do so.

Clearly, NXTH could face some intense selling pressure – potentially crushing ordinary shareholders – if private investors like O’Neal start dumping their stock next month.

C’mon Shaq, aren’t you rich enough? Don’t you have any better financial advisors than your current ones who got you into bed with such snakes?

That is what has produced the cease-and-desist letter. Well ... now those same words are on this blog too. Let us see if I have the honor of receiving such a letter. There is safety in numbers.

Props to Gary Weiss for his blog entry on point here.

No comments: