SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks
ZSUN The famous SI pig is seldom wrong about stinky stocks
An SI Board Since April 1999
Posts SubjectMarks Bans
9 5 0
Emcee:  StockDung Type:  Unmoderated
SQUEEKBOX (Famous SI PIG) sez the SEC be halting this one soon!!!

|\ /|
) \ --- / (
/ \ , - - - - -
( . . ) \
( ___ ) ZSUN \
\ (o o) / \@@@
\ ~~~ / _ __ / )
\ \ \ ____ ( ( \
\ / \ / \ \ /
vv vv v vv

April 28, 1999
ZiaSun (OTC BB: ZSUN)
4/28/99 close $22.13
Sponsored by WallStreet Guru

Sunburn

ZiaSun says it will be Asia's gateway to the online world, but could

it simply be headed into the sunset?

By Lynn N. Duke, staff writer

ZiaSun Technologies Inc. (OTC BB: ZSUN) seemingly came out of nowhere

in the past month, trading more than 2.3 million shares in four days

while its share price more than tripled.

What's behind this upstart? Not much, so far as we can tell besides a

slew of press releases and some pretty outrageous hype.

ZiaSun claims it will be Asia's portal to the Internet, and promises

to offer everything from online auctions to free email. But the

recent meteoric rise of its stock price and volume hit several notes

on the Stinky Stock scale.

We got a little nervous right off the bat when it turned out the

company's "world headquarters" shared a phone number with a

Vancouver, B.C.-based stock promoter, Veritas Group. Several people

at Veritas, which is handling the company's investor relations, were

unable to answer some pretty basic questions about the company's

stock structure or its business plan.

But here are the bare bones: ZiaSun was acquired by a shell

corporation more than a year ago in what is commonly known as a

reverse merger. There are 10.5 million shares outstanding, 2.5

million of which are in the float. For a rundown on the status of the

closely-held shares - are they restricted, under what terms, etc. -

we were referred to ZiaSun CEO Tony Tobin, who lives in Hong Kong.

Tobin did not respond to our questions, either through Veritas or a

direct email. So much for informing investors.

Trading Frenzy

More than 5.3 million ZiaSun shares have changed hands since March

29, with more than two-thirds of that volume trading in just eight

days. The heavy trading was preceded by a number of press releases

announcing mostly non-events, and some included ambiguous information

that could lead investors to believe the ZiaSun had some very

important business partners.

For example, this excerpt from a March 29 press release about ZiaSun's customer service center and how it can save companies money:

"America On-line discovered this fact when they developed a pilot e-

mail response center in ZiaSun's Clark facility in 1997. AOL has

expanded their own center to over 300 people, which according to AOL

management will save them US$15 Million per year.

"AOL proved to us that we were onto a worthwhile idea, and we believe

other high traffic web site owners would be glad to offer ZiaSun a

profit margin in return for saving them large amounts of dollars.

"High traffic websites like AOL, Yahoo!, E-bay, E-Trade, etc, could

save millions of dollars a year by using a service like ours. The

Internet is global, and companies which take advantage of the

benefits of this globalization will have the edge in the future."

Thinking that maybe ZiaSun is handling some of AOL's customer service

offsite in the Philippines? Guess again. AOL established its own

customer service program in the same facility ZiaSun uses, but there

is no customer service-based business relationship between the two

companies, according to Jason Birmingham, one of ZiaSun's account

reps at Veritas.

Earlier this year, ZiaSun told investors it would file its form 10SB

with the U.S. Securities and Exchange Commission by the end of March.

In March, the company said the numbers would be out in 60 days.

In the meantime, ZiaSun has released financial information on two of

its recently acquired subsidiaries - Momentum Asia and Momentum

Internet. But the information is incomplete and unaudited, so it is

of little value to investors trying to get a handle on ZiaSun's true

financial condition.

And, again, investors are fed ambiguous information, like this Nov.

17 press release touting six-month financial results from Momentum

Asia, Inc:

"Assets grew 262% to $2,100,000 from the FY1997 posting of $800,000.

The increase in assets was due to retained earnings, paid-in capital

by owners, and increases in the value of investments held by the

company."

This statement isn't entirely clear. Do they mean that these items -

retained earnings, paid-in capital and increases in investments - are

assets? Probably not, since they belong under shareholder's equity.

Or are they simply referring to them as reasons for an increase in

assets?

One other sticking point is the inclusion of "increases in the value

of investments." Generally Accepted Accounting Principles do not

allow for writing up the value of equity investments, unless your

firm's primary business is investing in the securities of other

companies. However you can write off the loss if share value goes

down. But, without knowing exactly what the "investments" are it's

impossible to tell whether the write up was appropriate.

An even more recent announcement holds few clues. An April 19 press

release heralds earnings of $0.11 per share (earnings of $1.15

million on revenues of $3.53 million) through the end of 1998, and a

2-for-1 stock split. But that's it. The auditor isn't named, there

are no actual financial statements or anything else to give investors

a sense that the figures are grounded in reality.

Again, Tobin is the man with the answers, but he's been silent.

Growing at the Speed of Hype

ZiaSun boasts that two of its subsidiaries are actually making money.

But there's no indication about how ZiaSun plans to finance its

ambitious expansion plans. Some of its better-heeled competitors are

already sinking billions into similar deals. In fact, one of ZiaSun's

press releases cites a $13 billion public-private cyberport project

being developed by the Hong Kong government and private business

partners, including Microsoft.

Momentum Asia handles the nitty-gritty side of ZiaSun's Internet

business - customer service, database management and direct mail -

while Momentum Internet is involved in the more high-profile online

areas - email service, a banner advertising network, a search engine

and a portal for brokers.

ZiaSun also says it will offer online auction services and a business-

to-business barter center, and it recently added Online Investor

Advantage to its stable. Online Investor Advantage, not be confused

with the magazine Online Investor, appears to be a Wade Cook seminar

copycat, offering people the formula for wildly successful trading -

for a price. The actual price isn't clear, since it's not posted on

the company's website and a query to Online Investor Advantage for

information went unanswered.

Although ZiaSun is traded in the U.S. and says its headquarters are

in San Diego, the company's focus is on Asia, a region many have

pegged as the next area for explosive Internet growth. But that

distance creates its own set of problems, making it difficult for

investors to get hold of company officials (there's a 13-hour time

difference), and almost impossible for U.S. investors to spec out

ZiaSun's operations.

But there's no shortage of information on the company, nor lack of

effort to promote it. ZiaSun pays at least two promoters - Veritas

and Interactive Business Channel - to hype the company. Veritas

receives $5,000 and 5,000 shares of stock each month for its

services. IBC was paid 50,000 free-trading ZiaSun shares. And then

there's all of the coverage ZiaSun's gotten on Stockhouse's Inner

Circle site, apparently a branch of Veritas - but you'd never know

that without a lot of digging and a little luck (the obscure

disclaimer link doesn't always work).

And yet there's really not much to promote.

Shareholder Hide-and-Seek

Other areas of concern include ZiaSun's trading site, Swiftrade, and

its affiliation with Amber Securities Corporation.

ZiaSun's claims about Swiftrade have been shifting almost since it

was launched. At first it was pitched as the only place to trade on

the Hong Kong and New York exchanges from one website. Now it's being

touted as the only site that focuses on overseas investors. Perhaps,

but overseas investors have access to the U.S. exchanges through any

number of brokerage firms, not to mention Internet-only traders like

E*Trade. And U.S. investors also have avenues to trade overseas

through their computers.

Swiftrade operates through Amber Securities, which along with its

sister company, Amber Capital Assets Ltd. in Hong Kong, has raised

the ire of several investors.

One reader in New Zealand said he was lured into buying ZiaSun stock

by an ACA lackey, but when he wanted to sell those shares a short

time later he got the run around. First he was told he couldn't sell

until he physically had control of the stock certificates (which the

salesman said could take three months), even though our reader was

assured that the shares were being held in his name at Amber's

offices. The hold up, according to Amber, was the transfer agent,

whose name he would not reveal. Even then, our reader was told that

he'd have to sign the certificates over to Amber's California

headquarters before he could sell them on the open market.

Fortunately our friend smelled a scam, threatened action with the SEC

and voila! his shares immediately became accessible.

ZiaSun is an unproven entity that talks big but comes up short on

facts and figures.

As always, tread lightly……………………….
 Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
ReplyMessage PreviewFromRecsPosted
9 ZSUN(K)'s chart is stinking up the place... finance.yahoo.comSammy Adams-5/4/1999
8 A little historical ZSUN data from Bloomberg.. Current Price USD 16 jjs64-5/4/1999
7 <ZSUN> "ZiaSun is an unproven entity that talks big but comes up shoSammy Adams-4/30/1999
6 <a ZSUN must read> financialweb.com Sunburn ZiaSun says it will beSammy Adams-4/30/1999
5 When I spoke to the nice Lady at the SEC she had already known about Cragun. ShStockDung-4/30/1999
4 Where's the beef (S.E.C. filings)? From a recent press release : "Sammy Adams-4/29/1999
3 SECURITIES AND EXCHANGE COMMISSION StockDung-4/29/1999
2 A quick recap of the story so far.... techstocks.com techstocks.com techstocjjs64-4/29/1999
1 Francois Goelo; Remember yesterday's date (4/28/99) and action...The Pump jjs64-4/29/1999
 Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):