ESCL

[Adam]

I don't own this TG.  Does anyone know why the damage?  They had earnings yesterday, but that can't be the total story??

[heeclee]

Along with steady influx of class action suit against them, this happened as well.
***************************************************************
MADRID, Spain, May 09, 2006 (AP Worldstream via COMTEX) -- Spanish police arrested nine people and raided the offices of two leading stamp collection companies as part of an investigation into alleged stamp investment fraud that could affect as many as 350,000 small investors, authorities said Tuesday.

Some 300 National Police officers took part in raids in five towns across the country directed against Forum Filatelico and Afinsa Bienes Tangibles, a major collectibles and auction firm. Afinsa is also the majority owner of NASDAQ-traded Escala Group with a 67 percent stake, or 18.2 million shares as of March 2006.

The Afinsa investigation sent Escala stock tumbling in pre-market trading on INET Tuesday. At 1258 GMT, Escala shares were down 45.4 percent at ?13.67 (US$17.46). Escala was previously known as Greg Manning Auctions, based in the U.S. state of New Jersey.

The operation forms part of a joint investigation launched by the National Court, tax authorities, financial crime prosecutors and the National Police over an alleged pyramid-type scheme based on overpriced stamps and other collectibles...

[tokyopua]

http://www.thestreet.com/_yahoo/markets/marketfeatures/10285664.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

In at 7.7, dont know where its heading, but it lost 86% of its value, so a 300% return is not impossible.

[Orson Vaughan]

Afinsa and Forum Filatelico Stamp Fraud

Dear Sirs, Madams, Club's members and users,

You almost certainly know about the Afinsa and Forum Filatelico Scam, that have been shut down by the authorities.  This companies sold investments plans in stamps for 1000x the real value on the market with the promise to buy back in future (ten years latter) at the sale price more 7% of interest at year. This interest is the double what a client could get at any commercial bank. If the business was clear good I am sure the banks was available to invest too. But, the banks and the smart people don't invest in this Ponzi schemes because every smart guy knows is impossible a company (with good rating) pay for the money  2x the the current interest in the market to finance their activate. In this case investment in stamps.

The stamps market are depending, like any other market, from the offer and demand. And for this anyone can't to guarantee the price of the stamps in the future.  Naturally, what this companies were doing is paying the annual interest to older clients with their own money and with the money invested by the new clients. If an investiture give a 1.000USD, they can pay 8% for year for ten years with their own money and take 20% for the companies more interest in the bank. After the ten years a new fool will be pay the older.

The Afinsa and Forum Filatelico are financially insolvent. And none of the investments were insured by the government or central bank, as bank deposits are. This kind of activity doesn't have regulation and for this was easy stay twenty-five years open to public.

One of the first signal of troubles was when the GMI change this ticker and name  to ESCL, Escala Group. In this time some people was talk about the possible Ponzi Pyramid in this kind of investment.

The Think Finance - Investor Intelligence worked since 2003 to expose those Ponzi scheme. They send a lot of information to the authorities and we believe they are  the setup up for the beginning of the end of this scam. This website is well known for the good articles about the stock market trading and having denounced the PIPS scam and helped hasten the demise of the fraud, other Ponzi scheme with origin in Malaysia.

With this stamp fraud is possible the consumer confidence takes a major hit, with some of the victims completed wiped out.  If this scam could continue for some more years know is impossible. The "bank" run of the investors to this companies will be finish them leaving this companies without liquidity to fulfil the commitments with all investors. When all clients wanted their money back at the same time the result is the bankrupt. In this case I think few investors will be waiting to the maturity of the contracts to take their money back.

For know other similar schemes continue operating, out there selling some more "tangible goods", like the Afinworld or the Arte Y Naturaleza.
This scam can be interest to the trades who want speculate with the bankrupt of this two companies. Special Afinsa trough Escala Group.

Escala Group is a US company listed in Nasdaq (ESCL:Nasdaq) and controlled at 68% by Afinsa. The important here is not Afinsa be the owner of Escala Group but be the best client. Afinsa has been the best client of the stamps and coins of Escala Group since 2003. So, the Escala Group depends their financial activity on Afinsa.
I think the Escala Group will be to the bankrupt too, and it is a long term good short for sure, but the only problem on this days is the bad news are deducted in the price and any good news (or not bad) can make the stock rise a lot, because the short of free float is 75.69% (4.859.221 shares short), with a short ratio (days to cover) of 29.3, can to provoke a strong short squeeze.

I am following this scheme and the price movements of Escala Group and in the development of the news or a trading opportunity a will post here.

Sincerely,

Orson Vaughan

[Ann]

I think the Escala Group will be to the bankrupt too, and it is a long term good short for sure, but the only problem on this days is the bad news are deducted in the price and any good news (or not bad) can make the stock rise a lot, because the short of free float is 75.69% (4.859.221 shares short), with a short ratio (days to cover) of 29.3, can to provoke a strong short squeeze.

I am following this scheme and the price movements of Escala Group and in the development of the news or a trading opportunity a will post here.

And here we are one and a half-month later and we have a full-blown short squeeze.

There is news out in Spain and Escala just reported monthly US record auctions: http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060706005463&newsLang=en

- and the shorts are running for cover.

But the story is even better now because the short position was 6.5 million in June and probably much higher now.

Today was the first day of a very long and painful short squeeze and the stock is already up 44% (wish I knew how to post these fancy charts!)

Can't wait for the trading to start tomorrow. This one will run faster than the shorts can cover.

GLTA

[ma7]

shorts will start covering   

August 24, 2006
Escala Makes Regulation SHO List, Spurs Shorts
Escala Group Inc. (Nasdaq: ESCL) made the Regulation SHO List yesterday. The list, which is published each business day well after the end of trading could have convinced short sellers to cover their shorts before it got too late. According to SEC regulation, a stock that has met the threshold security requirements for five consecutive trading days, must have their short positions cleared below the requirements before thirteen days after being on the list. If the short position is not cleared now, then a forced buyout could be initiated at that time. With that being said, short sellers must be nervous as there are 6.41 million shares short with the public trading float of Escala at just 6.43 million shares. Additionally urging the shorts to cover was an article circulated this afternoon, reporting that the European Commission had decided it would not investigate two cases of fraud linked to stamp-trading company Alfinsa. Hence, there was a spike in afternoon trading by $.92 to $6.14 on heavy volume of 1.6 million shares.
posted by Ant & Sons at 3:57 PM 0 comments links to this post 


http://www.antandsons.com/wordonthestreet.html


The European Commission has said that it will not be investigating the two cases of fraud linked to the stamp-trading companies. Forum Filatélico and Afinsa in Spain, said that the responsibilities are entirely national. This is because neither company is thought to have broken European stock trading law.

http://www.typicallyspanish.com/news/publish/article_5973.shtml

[ScottishTrader]

If it doesn't pull back tomorrow, this could have something to it... a move above 6.50 should give it some legs.  Symmetrical triangle breakout that measures 6.50-4.20 = 2.30 + 5.21  = 7.51 target.  After that next solid resistance looks to be around 9.20.

Will keep an eye on it 

[tokyopua]

If it doesn't pull back tomorrow, this could have something to it... a move above 6.50 should give it some legs.  Symmetrical triangle breakout that measures 6.50-4.20 = 2.30 + 5.21  = 7.51 target.  After that next solid resistance looks to be around 9.20.

Will keep an eye on it 

I almost bought this stock at $4, and as I was deliberating, it got halted.  It opened around 7 on good news, and I bought it as per my post in this thread, wound up making a little money holding it about a day.  Would like to make some real money on it though, so I will be watching too.  If enough people like us jump back in, shorts will fry and prices will rise!

[tokyopua]

I just noticed that Yahoo doesnt have any confirmation of the good news in this stock yet, and instead Motely Fool published one of their stock sinker articles about the stock tonight. 

http://www.fool.com/news/commentary/2006/commentary06082417.htm?source=eptyholnk303100&logvisit=y&npu=y

Probably the founders are short or something, I never trust those guys, but their articles do move stocks as I have found out to my detriment in the past with stocks like NVAX, etc.

[akclide]

The chart is shoeing strength.%@ wk high was35 now it is sitting at 5.16.10 dma just crossed over 20 dema.Also the stock was side tracking since middle oct.It is breaking that chanel. Good luck

[kslifka]

ESCL is so on fire.

Could be a big gainer down the road.  Lots of room above.

[HANDBALLJIM]

Thanks, great post. I am jumping in small...since we moved 80% already. 

[bocasva]

ESCL is so on fire.

Could be a big gainer down the road.  Lots of room above.

kslifka,
It sure is on fire, I almost pulled the trigger when it retraced to 6.50...but I chicken out because of the general market acting bearish today.
Congrats to anyone holding this one, nice gain so far.

[HANDBALLJIM]

I got in at 8.06 and it took off to 8.90 so I just place a stop order in at 8.40.

This is a 10 on the risk factor...but huge momentum going north. If it is true about the huge short position...they will have to buy back at some point. I would feel more confident if they would have also restated earnings, etc. and they were positive.

Now the fun part is when to sell at 3:55pm...after hours it will move in one direction or the other? Or wait to see if Wednesday brings more action to the upside.

[kslifka]

I got in at 8.06 and it took off to 8.90 so I just place a stop order in at 8.40.

This is a 10 on the risk factor...but huge momentum going north. If it is true about the huge short position...they will have to buy back at some point. I would feel more confident if they would have also restated earnings, etc. and they were positive.

Now the fun part is when to sell at 3:55pm...after hours it will move in one direction or the other? Or wait to see if Wednesday brings more action to the upside.

ESCL just put in a new high even after going parabolic and pulling back.

As far as longer term.  There is a good chance (better than 50%) of this pulling back tomorrow....but you just never know.  I will look for an entry tomorrow or the next.

Good luck