Is this the worst stock ever?
W&D was captivated by the movie The Wolf of Wall Street.
The chutzpah and bravado shown was amazing. And were it not all true it would be entertaining.
And W&D thought that all of that behaviour died with the GFC.
Work with W&D on this.
Consider Neuromana Ltd, a US company (US code: Nero). Its market capitalisation is US$35 billion. That is about the size of Wesfarmers (which owns Coles and Bunnings).
W&D isn't really sure what its business is.
Actually, it has no business. Indeed, it has no appreciable assets, no proprietary technology, no tangible net worth and no income. And it hasn't filed a return to the US Securities and Exchange Commission (the US equivalent to ASIC) since September 2014.
The SEC on Monday halted trading in the stock, noting, “potentially manipulative transactions” and concerns about the “identity of the persons in control.”
W&D guesses that a company's market cap going from $3,500 to $35 billion without any revenue might be, err, suspicious.
Before its suspension, the market cap of Neuromama, which was based in southwest Siberia before moving to a beach community near Tijuana, Mexico, was greater than even Tesla Motors.
US journalists at Bloomberg sought comment from Neuromama’s Chief Executive Officer, Igor Weselovsky, Chief Financial Officer Karapet Gevorgyan and Dante Pedroza Mendez, the Chief Operating Officer, but failed.
But Steven Zubkis, the chief marketer according to the company’s website, did comment via email.
Zubkis has a history of run-ins with the law. Also known as Steven Schwartzbard, he was sentenced in 2007 to five years in prison for defrauding investors in a $1.8 million scheme through misrepresentations tied to the renovation of a Las Vegas casino.
The Ukrainian immigrant was sued by the SEC in the 1990s for orchestrating a $12 million penny stock scam. He was ordered to pay more than $21.6 million in disgorgement and penalties.
"We're suffering from a negative side effect caused by our success," Zubkis said.
Time to go to the tailor, W&D would advise Mr Zubkis, and get a new striped suit made up.