Virtual reality biz actually imaginary
The Securities and Exchange Commission has charged 3001 AD, which claimed to be a virtual reality technology company, with fraud. The SEC claims the company was nothing more than a boiler room telemarketing scheme designed to fleece investors.
The SEC alleges that 3001 AD, LLC and these individuals raised approximately $20 million from about 500 investors nationwide through a maze of unregistered offerings that hyped the company’s supposedly promising virtual reality products, including a helmet system tracking players’ head movements to provide a 360-degree view in a video game. Investors were told in the offering materials that the sales commissions paid on their investments were dramatically less than they actually were. An imminent Initial Public Offering (IPO) was repeatedly hyped to investors while no steps were actually being taken toward going public. And prestigious business relationships between 3001 AD and Microsoft, Apple, and former Disney CEO Michael Eisner were touted to investors even though such relationships never existed.
Turns out the promised profits, like the professed products, were virtual.
Don Mecoy
Business Writer
Mad Money’s Jim Cramer coming to OU
Jim Cramer, money maven of the rolled-up shirt sleeves and sound effects, will visit the University of Oklahoma next month. Cramer, host of CNBC’s “Mad Money,” will tape an episode of the show before a live audience of OU students on Oct. 30. He also will be the keynote speaker at a dinner for OU business students and alumni on Oct. 29.
OU President David L. Boren said Michael Price, the former Wall Street money manager who the OU business college is named for, arranged Cramer’s visit.
“Jim Cramer’s visit will give OU students an excellent opportunity to hear one of the most prominent personalities on Wall Street,” Boren said.
Anyone have any questions they would like to ask Mr. Cramer? Submit them in the comments.
Don Mecoy
Business Writer
Table for Mr. Jackson
Is a well-greased palm the key to a life of priviledge? Tom Chiarella, writing in Esquire, heads out in New York with a stack of $20 bills to find out. The short answer? It works, unless you’re asking someone to something that might cost them their job.
I always grease Bobby H., the bellman at my hotel, and on my first night, within minutes of the pass, he suggested that I might request a room upgrade. He even gave me a room number to ask for. Another twenty at the desk and I was out of two queens, snug in my one king. The next day, we ran the same drill, and wham, I was in the minisuite. The twenty after that, I was in a full suite with a view of Times Square. We used a different desk guy each day. When you’re passing twenties, Bobby H. told me, you have to spread the wealth. “It’s a one-time trick,” he said. “You don’t want anyone to catch on.” Somehow he managed to take a twenty each time, having caught on fully some time ago.
However, Chiarella is a bit less successful in buying favors during a trip west. (via kottke)
Don Mecoy
Business Writer
Investors pricing stocks for earnings growth
Based on this chart of price-to-earnings ratio among S&P 500 stocks, which has surged since the early March bottom, stock buyers are anticipating that corporate earnings are going to grow. The latest spike shows a 50 percent rise in the index while earnings have declined.
Bespoke Investment Group, which produced the chart, notes: “Obviously if the current bull is going to have any sustainability at all, earnings will have to start growing again. But for now, as evidenced by the skyrocketing P/E ratio, investors are paying up on the hopes of future earnings growth.”
That reflects a surprising level of optimism. (via Felix Salmon)
Don Mecoy
Business News
Financial fraud
New York Times financial columnist Ron Lieber reacts to learning that his financial advisor under investigation for improper movement of funds out of some accounts. Lieber, who selected his money manager based on an article he did on questions investors should ask potential advisors, was aghast at learning of the accusations. He recommends not giving advisors the freedom to invest funds without permission.
Futhermore,
You can limit any damage by not letting a bad situation get worse. Trust but verify. Open your mail. Confirm the accuracy of your trades and fund transfers. Read your account statements. Every month. Every number. Every single word.
Solid advice from someone with experience.
Don Mecoy
Business Writer
Keith Geary interview
I introduce Keith Geary as a smart guy in this interview, and I stand behind that. Geary, CEO of Capital West Securities in Oklahoma City, discusses some investing ideas, including his belief that stock prices may have bottomed out.
By the way, this was the second interview of Geary. The first, taped just before this one, was plagued by technical difficulties. (In fact, some of the problems continued — you might want to turn down the volume before starting this presentation) In addition to being intelligent, Geary is a good sport. He walked right back in the studio for take two.
Don Mecoy
Business Writer
Oracle of Omaha on CNBC today
Warren Buffet made a lengthy apperance on CNBC today and discussed a wide range of topics on things economic and market-related. He said the American economy has “fallen off a cliff.” However, Buffett offered a fair dose of optimism as well.
Among his takes:
–The economy “can’t turn around on a dime” and a turnaround “won’t happen fast.”
–Five years from now, the economy will be running fine. The strength of the American system will pull it through, just as it has many times in the past.
–Democrats and Republicans should work together and not try to take advantage of the economic situation to achieve partisan goals.
–Inflation has the “potential” to be worse than the 1970s.
–Most banks are in “pretty good shape” and can “earn their way out” of the current problems given the low cost of funds. Banks, however, “need to get back to banking.”
–Extremely important that the government make clear depositors won’t lose their money if banks fail. Obama needs to make a “clear statement” in support of the banking system.
Don Mecoy
Business Writer
Crisis of credit videos
Graphic designer Jonathan Jarvis has produced a clever and compelling explanation of the current credit crisis. It’s worth the several minutes it takes to view. Unfortunately, it’s so popular it has crashed his site, where a HD version of this appears (I’m told). Here are the YouTube versions:
PART 1
PART2
(via The Consumerist)
Don Mecoy
Business Writer
Mark Cuban offers funding for businesses
Mark Cuban, billionaire owner of the Dallas Mavericks, has offered to invest in businesses that file business plans on his blog. He calls it the “Mark Cuban stimulus plan — open source funding.” All details of the business, and of Cuban’s investment in whatever businesses he chooses to help finance will be posted on his Blog Maverick.
But his financing isn’t available for just any business. Here are some of Cuban’s rules:
1. It can be an existing business or a start up.
2. It can not be a business that generates any revenue from advertising. Why ? Because I want this to be a business where you sell something and get paid for it. Thats the only way to get and stay profitable in such a short period of time.
3. It MUST BE CASH FLOW BREAK EVEN within 60 days
4. It must be profitable within 90 days.
5. Funding will be on a monthly basis. If you dont make your numbers, the funding stops
6. You must demonstrate as part of your plan that you sell your product or service for more than what it costs you to produce, fully encumbered
7. Everyone must work. The organization is completely flat. There are no employees reporting to managers. There is the founder/owners and everyone else
8. You must post your business plan here, or you can post it on slideshare.com , scribd.com or google docs, all completely public for anyone to see and/or download
9. I make no promises that if your business is profitable, that I will invest more money. Once you get the initial funding you are on your own
10. I will make no promises that I will be available to offer help. If I want to , I will. If not, I wont.
11. If you do get money, it goes into a bank that I specify, and I have the ability to watch the funds flow and the opportunity to require that I cosign any outflows.
12. In your business plan , make sure to specify how much equity I will receive or how I will get a return on my money.
13. No multi-level marketing programs (added 2/10/09 1pm)
Don Mecoy
Business Writer
Demographics and investing
I wrote a story about author and economist Harry Dent’s upcoming appearance in Oklahoma City that appeared in Sunday’s editions of The Oklahoman. A few readers scolded me for failing to point out some of Dent’s misguided forecasts. For instance, he once predicted the Dow Jones Industrial Average would reach 40,000. As I told these readers who complained about the story, I think consumers take any investment advice with a grain of salt. I found Dent’s approach to be unique, and in stark contrast to much of the conventional wisdom currently being offered.
This video is with Edmond money manager Nick Massey, who uses Dent’s demographic research in developing his economic outlook. Massey, vice president of Householder Finance, is sponsoring Dent’s appearance at 7 p.m. Feb. 17 at the Cox Business Center. The event is free and open to the public, but reservations are required. Call (800) 337-6108 to register. I’d be interested in hearing from folks who attend Dent’s presentation.
Don Mecoy
Business Writer
