January 20, 2012 - 12:50pm EST by
2012 2013
Price: 28.34 EPS $0.00 $0.00
Shares Out. (in M): 5 P/E 0.0x 0.0x
Market Cap (in $M): 126 P/FCF 0.0x 0.0x
Net Debt (in $M): -55 EBIT 0 0
TEV (in $M): 70 TEV/EBIT 0.0x 0.0x
Borrow Cost: NA

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  • China
  • Fraud


Thesis:  Short BVSN                                                                                     1.20.2012

Investment:  Social Network For Businesses and a China Connection With Long Legs!!!!!!!!!

Just kidding.  BVSN is a classic low-float low-volume pump and dump that is underpinned by what could be a quasi-sexy story, which has been bolstered by the rising market and 'recent business wins.'  The stock is being promoted by serial pump and dumpers, whose track records are long and nefarious. 

I’m going to make this pretty short and sweet, mostly by showing you some interesting links:

Ok.  Now we have some idea who’s promoting on the long side.  Let’s look at their backgrounds:

Read the comments in that last one.  A good newsletter for researching shorts!  Ha.

For posterities sake, even Michael Lewis noted this guy Jonathan Lebed.  See below:

Guess who’s behind the National Inflation Association?  I really encourage you to listen to the whole Schiff interview.

Amazing.  Really Boiler Room type stuff.  There's plenty more detail out there on the NIA, Lebed, and their promotional activity.  I figure this is probably enough to convince you the recent rally isn't based on reality.  We can go into more detail in the comment section if anyone pleases.

On to BVSN fundamentally.  Currently, BVSN is losing money and revenues are declining. It’s a dot-com bust that used to trade below net-net.  But now its worth 3x revenue!  The major growth project is Clearvale, a ‘social network for businesses.’  How’s that working out for them?  Meh.  Certainly it’s not visible in the financial metrics, and Alexa ranks it a cool #385222 in global popularity.  I’ll admit popularity is significantly over a 3 month time frame, but I’d wager most of that is due to the stock promotional activity.

For the record, the Digital London 'win' doesn't really mean anything.  In fact, it was annouced 10.27.11 really.  The stock went down that day.  Also, allegedly the NIA isn't selling their shares until 2.12.2012.  But I'd doubt they still own anything at this point.

The stock is up 3x since the beginning of the year on no news whatsoever.  Could it go up more?  Sure.  We're not claiming to catch the top here and there is a material risk of the sham continuing for at least another week, but my guess is that regular (poor) earnings on 1.26.2012 will act as a strong catalyst for selling.  It's also possible that the CEO commentary will be bullish (as always) which could drive sentiment, even though the numbers will likely suck.  The important point is that, in 1 year, this thing will likely be worth cash or less.

We or funds we own may take a position in this security.  Do your own diligence, people!


Earnings on 1.26.12
Momentum dries up
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