Upgrade-Absturz: Hier ist der Grund!!!! - 500 Beiträge pro Seite

[Faydorn.Moertsch]

Smart Card

By RHONDA BRAMMER

For quite a spell shares of Upgrade International were downright moribund.
Indeed, early last year, the shares could be had for as little as 19 cents apiece.
By fall, it was higher -- but $2-$4 is not exactly blue-chip range. Then --
varoom! By January 19 of this new millennium, the shares had rocketed to an
intraday high of 89 7/8. And though the stock closed Friday a fair piece
below that peak -- at 63, to be precise -- Upgrade International still boasts a
market value upwards of $1.4 billion.

What`s behind the stock`s meteoric rise from pennies to big bucks? Logical
question and, by way of finding the answer, or at least some clue, a curious
investor might turn to a 10-K or 10-Q to get the financial dope. Or a proxy,
to get a line on management.

Trouble is, Seattle-based Upgrade International, though its shares have been
trading for well over two years, has never filed a 10-K, 10-Q or proxy with
the SEC.

But hey, you object, doesn`t the SEC
require OTC Bulletin Board
companies to file? Absolutely. As of
January 4, 1999, all OTCBB firms
must report financial info to the SEC.
However, companies already trading
on OTCBB were granted a grace
period ranging from seven to 18
months, depending on the alphabetical
order of their stock symbol. Thanks to
this proviso, the U`s, as in UPGD,
don`t have to file until May 2000 to
keep their listings.

In any case, the OTC Bulletin Board imposes no listing requirements -- that`s
right, none. All a wannabe Bulletin Board issue need do to win a listing is
scare up a market maker who wants to trade its shares and will "sponsor" the
company.

How, then, did the average investor dig up enough info to plunk down their
hard-earned dough for a piece of the company? Beats us.

Our conclusion, after perusing newspaper clips, press releases and Web
pages, and after chatting with the company`s founder and chief exec,
41-year-old Daniel Bland, is that Upgrade is a spectacularly overvalued
stock.

The saga of Upgrade, the rags-to-riches stock, began, appropriately, amid
humble circumstances. On November 30, 1998, according to a disclosure
statement supplied to brokers and dealers, it had 12.5 million shares, total
assets of less than $2 million and an accumulated deficit of $500,000.

It had acquired 18.5% of California-based UltraCard, a private,
development-stage company hoping to commercialize high-capacity data
storage in a credit-card format, for $450,000. On November 30, 1998,
Upgrade`s stock closed at 25 cents a share.

Though assets were meager, corporate activity was awhirl. From December
`98 through March `99, Upgrade was a veritable wellspring of new corporate
life, forming several joint ventures with UltraCard and launching a partnership
to exploit e-commerce.

Investors, however, were slow to respond to this burst of creative energy. On
March 31, 1999, Upgrade shares closed at $2.

On June 8, Upgrade completed the acquisition of 50% of Centurion
Technologies, a maker of smart cards and storage-card mediums. Upgrade`s
stock moved to $3.25.

Fast forward to September 27, when Upgrade finally raised a measurable
amount of money: $9.5 million in a private placement. Investors bought 3.8
million shares at $2.50 each. The stock was then trading in a range of $3-$4.

Shortly after, Upgrade increased its stake in UltraCard to 50%.

A Regulation S offering in November raised another $2 million. Three foreign
investors paid $2.50 a share. At the end of the month, Upgrade stock closed
at $15, a move Bland attributes to a tech-industry gathering.

Suddenly, the stock caught fire and more than doubled in December and, in
January, rocketed to over $89.

Eleven days later, Upgrade did another Reg S deal, this time selling shares at
$44.

The tail-end of last year and the beginning of this, of course, was prime time
for tech stocks of every description. But in the case of Upgrade, great gobs
of high-octane hype added fuel to the speculative fire.

Take, for example, to get a feel for what we`re talking about, the headline on
the company`s Website: "UltraCard`s Proprietary Technology Will
Revolutionize the IT Industry."

The technology, management goes on to brag, "is positioned for immediate
acceptance in the existing and rapidly growing smart card market." And it
pegs the global market, thanks to new applications, as approaching $30
billion.

Forgive us our lack of enthusiasm. For starters, as Bland points out, there will
be no product, even to license, until maybe the first quarter of next year.

And if UltraCard really has such a super technology, we can`t help but
wonder, how come it didn`t go public instead of selling a piece of itself to
Upgrade?

Furthermore, Upgrade paid $7.95 million for its 50% stake in UltraCard,
completing the purchase less than six months ago. Let`s suppose the value of
Upgrade`s interest in UltraCard quintupled since September. Even then, no
way should Upgrade shares be selling north of $3.

The bottom line is, quite simply, there`s no reasonable explanation for how an
$8 million investment balloons into a $1.4 billion market cap.

Our qualms about the company and its stock didn`t exactly subside when,
digging through stacks of old newpaper clips, we discovered that Upgrade`s
main man, Daniel Bland, has in the past harbored a propensity to portray
events -- shall we say? -- rather too optimistically.

As president of Empyrean Diagnostics, a Vancouver-based company
developing a test kit for AIDS, Bland boasted in the May 4, 1993,
Vancouver Sun that without the benefit of a laboratory or electricity, the
quick-diagnosis kits could determine whether a person was HIV-positive, and
in only seven minutes.

"This technology belongs in every village in the world," he told the Sun, noting
that his firm intended to blanket the Third World with the kits. "This is going to
be like Coke and Pepsi."

And sure enough, management was soon announcing huge orders. From its
1994 low to its high in September `95, shares of Empyrean Diagnostic
appreciated tenfold.

But out of the blue, the Vancouver Stock Exchange halted trading in the stock
and, on November 10, 1995, compelled Bland to issue a clarifying press
release.

Of 2.4 million employee and director stock options given to 44 individuals,
Bland disclosed that only nine of the latter were bona fide directors or
employees.

As to Empyrean`s announcement in January 1994 that a marketing partner
had obtained an order for one million test kits, Bland confessed, "There was
no commitment or promise to purchase one million of these kits."

In like vein, Bland admitted that when the company declared in March `94
that its U.S. subsidiary was on schedule to distribute eight million test kits in
fiscal `94, it "did not at that time have a purchase order." And even if it had
had one, the company "was not capable of producing such quantities of kits."

Moreover, as to a purported agreement with Jin-Greene Biotechnology to
distribute 18 million kits to the minister of health of the United Arab Emirates
for expected revenues of $35 million, it was, in plain language, bogus --
nothing more than "a letter of inquiry."

When asked Friday about the press release and the problems with the
Vancouver Exchange, Bland dismissed the latter as "technical violations, if you
will."

Even as he was promoting Empyrean, Bland was selling stock. But such sales,
he insists, were not for personal gain; instead, the proceeds were plowed
back into additional private placements. "It was a financing mechanism," he
shrugs.

When queried, Bland said he was familiar with Philadelphia-based Infusion
Capital, a firm that registered to sell 100,000 shares of Upgrade stock right
around the time it was peaking in January. Depending on how much stock
was actually sold, and when, Infusion likely pocketed a nice piece of change,
running into the millions.

The president of the firm, Bland recalled, wrote a positive research report on
Upgrade when the stock was trading at 20-30 cents.

"Infusion Capital did a report in 1998," he explains, "and were paid in stock in
lieu of cash."

Rather than pay for a research report in cash, we asked, "you paid in stock?"

"That`s right."

[Jeremy]

Könntest du so nett sein und nur eine kurze zusammenfassung von diesen Text machen.Danke im vorraus.

Gruss Jeremy

[investment2000]

So ist das Leben (Börse)
Es geht hoch und noch schneller runter.

Wo seht ihr den Kurs in ein paar Tagen??

Ein nachdenklicher Anleger