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TOPIC: It’s all about money, until you have it

It’s all about money, until you have it 07 May 2014 09:18 #1654

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I was going through the web and looking at BOD sizes for micro cap companies like Cytori (following the latest 8 k filing)

when I stumbled on an article that I read about 7-8 years ago on option backdating and which involved our BOD Chairman David Rickey - picture below--


in those days when I read it , it had to do with the incredible number of options given by Calhouns father-in-law Marshall Cox.
That reminded me that Rickey IS Chairman of the Compensation Committee and the number of options have been astronomical the past few years, although performance was simply the contrary.

Let me have your thought on this:

Like a lot of companies in early 2001, the one Mr. Rickey ran — a silicon chip maker called Applied Micro Circuits — was going through tough times. Its customers were canceling orders for new equipment, and its stock had sunk from a high of more than $100 in the summer of 2000 to just $29 when Mr. Rickey sat down with Ms. Bartiromo.

He started the interview by being upfront about the state of the industry, predicting that things might get worse before they got better. But within a few minutes, he was making his pitch. His company’s products were not low-priced commodities, he said, and the long-term prospects looked as good as ever. “The demand for bandwidth,” he explained, “is not only insatiable, but it’s in its infancy.”

At this point, Ms. Bartiromo reminded him that about a year earlier, he had dared investors not to own Applied Micro stock, and Mr. Rickey quickly reissued the challenge on CNBC. “You know, Maria, I am very bullish about the company. I think we’re in the right space,” he said. “I dare you not to own my stock now. But, you know, I’m kind of a gutsy guy, and I have a lot of confidence in what we’re doing.”

What made this so amazing was that Mr. Rickey had already come very close to accepting his own dare. Ms. Bartiromo never asked him about his own holdings of company stock, and he didn’t volunteer the information, but it turns out he had sold more than 99 percent of his shares over the previous two years, for a profit of $170 million. He was unloading the same stock that he was urging investors to buy.

Mr. Rickey stepped down from Applied Micro last year, and now — with the stock trading at $2.37 — he’s in the news again. As part of the growing inquiry into the backdating of stock options, the Justice Department and Securities and Exchange Commission are investigating whether the company improperly altered the dates on option grants to benefit employees.


Link to whole article : Turning back the clock on backdating
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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

It’s all about money, until you have it 07 May 2014 09:44 #1655

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Looksto me like the fox is guarding the hen house. I just hope he has enough personal money to do the right thing with Cytori. Reality is that with money there is never enough.

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It’s all about money, until you have it 07 May 2014 09:55 #1656

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Yes- If I recall right, the SEC investigation was dismissed for lack of evidence, so Rickey is not convicted in any way.

The large shareholders like him - because - 1. he has money- the article said 170 Million from AMCC options alone, which he sold in time before the share price went down of AMCC. 2. he took the job to get the personnel issues straight (he is doing that), apparently Dean was too soft on that.

But from the perspective of shares - never trust Rickey in respect of advice on share ownership...lol :grin: :joy:

Than again- we have not had joy from Dean´s statements- but I still do believe them- assuming execution. :nice:

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Board moderator and Site-owner. I still regret the day I started analysing the prospects of MacroPore (now Cytori) back in 2004- a left-over from the tech-bubble at that time from the century change in my portfolio- and became addicted to Cytori´s fat cell technology. :cry:

It’s all about money, until you have it 07 May 2014 10:10 #1657

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I know what you are saying. I don't have anything against someone making money. But when it is so excessive that it hurts the company and the shareholders it is not right. It is difficult to prove criminality in any of these cases especially when the subject of the investigation is flush with cash and has the backing of the rest of management which have also benefitted. Glad you are staying positive. It is getting more difficult considering all that is going on. Of course that all could change with some good news and a bump in the PPS.

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