What I took as a scathing article appeared on People.com regarding Tom Biscardi’s public venture, “Bigfoot Project Investments, Inc. (BFII), Stock Ticker BGFT listed on NASDAQ, which referenced a CNBC article, but more on that in a minute.
A Quick Recap…
As mentioned in an earlier blog, Bigfoot Project Investments is the parent company of “Searching for Bigfoot,” where allegedly the so called “Godfather” of Bigfoot, (ahem) is making his farewell tour and is allegedly turning the reins over to his son TJ. What I suspect and will make this prediction, is that the elder Biscardi at the very least will still remain in charge of Bigfoot Project Investments as its CEO, thus still being in charge of SFBI’s parent company.
According to the latest SEC filing, this appears to be the case,
“As of July 25, 2016, Carmine T. Biscardi, owns 58.92% of the outstanding common stock. As a result, Mr. Biscardi currently possesses and will continue to retain significant influence over our affairs.”
Much of my material on SFBI and it’s leader, De Facto or not can be read here.
The Big “Whoops”
Sometimes being a publicly traded company can open up some eyes to the actual reality versus the “preached” reality of a business. In this case the parent company of SFBI.
The article contended that somehow, BFII had a market capitalization of $10 Billion.
“Market capitalization refers the total dollar market value of a company’s outstanding shares. Commonly referred to as "market cap," it is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determine a company’s size, as opposed to using sales or total asset figures…
Large-cap companies typically have a market capitalization of $10 billion or more. These large companies have usually been around for a long time, and they are major players in well-established industries.”
According to CNBC.com,
“In its filings with the SEC, Bigfoot says its stock became eligible for trading on June 28, 2016, on the OTC Bulletin Board, but as of July 29 the stock had not yet begun trading. Still, this week FactSet listed a current share price of $50.01 for BGFT. That, multiplied by the number of shares outstanding (more than 200 million) gives the $10 billion figure for market capitalization.
It’s not clear where the $50.01 stock price came from.
What is clear is the tale of BGFT highlights the strange distortion effects that can happen in the pink sheets netherworld, a mysterious place where the metrics investors use to value companies such as market capitalization can lose all meaning in a haze of accounting fiction.
Market capitalization is a fine way to measure big, widely traded companies. But for a firm like Bigfoot, it doesn’t make any sense at all. A $10 billion valuation puts Bigfoot on a par with Xerox, Discovery Communications and Gap — well-known companies with massive assets and popular products.
(BFII), by contrast, lists current assets of $221 in cash along with 73 original casts of Bigfoot footprints, a 109-inch skeleton and a rubber suit from a 2008 Bigfoot hoax.”
It is nice to know that I have more cash on hand than BFII. But in reality and what the other two news organizations failed to realize is that the $221 was a 2015 figure not the 2016 figure which lists cash assets as 19K on hand and a 2K money market account.
But where did that money come from? Was it from revenue? No. It likely seems it came from a $81K from an advance from Shareholders.
“In the year ending July 31, 2015, shareholders advanced additional funds in the amount of $22,633. In the nine-month period ending April 30, 2016, shareholders advanced additional funds in the amount of $ 21,626. The balances of Advances from shareholders were $81,341 and $59,715 as of April 30, 2016 and July 31, 2015.”
This brings us again to the problem of at the time SFBI’s own self inflated, self worth, estimated by as the 2008 business plan stated, “by none other that Tom Biscardi himself, the world’s leading authority on Bigfoot.”
Not to mention the fact that in 2006, SFBI had posted they never disturbed the skeleton, taking only a few artifacts from the grave site, after receiving a backlash from the Bigfoot community, discussing the legality over disturbing a gravesite let alone removing it without government permission.
Here is that statement direct from the SFBI website at the time:
So where is the lie? If anyone has seen the original “Bigfoot Lives,” they most certainly are not just observing it, as we see TJ Biscardi in the gravesite brushing dirt.
Biscardi stated he did not believe the the 10 Billion dollar evaluation stating, “Someone doesn’t have their facts right.” The SEC filing would agree with that statement.
2008: 17 Million / 2015: 27K
The real value of BFII is clearly seen on the balance sheet provided by an audit firm, also can be found from the sourced SEC filed document listed above. A far cry from the self appointed 17 million dollars it tried to portray to investors.
A big caveat emptor for their stocks is also another quip from the CNBC article:
“…it (BFII) is what’s known on Wall Street as a "pink sheets" firm. That means it is an over-the-counter stock traded in the OTC’s least-regulated and least-scrutinized market. On its website, OTC Markets describes the pink sheets market as home to penny stocks, shell corporations and "distressed, delinquent, and dark companies" that are not able or willing to provide adequate information to investors.”
The People.com article was even less flattering:
“Biscardi’s company (stock ticker: BGFT) was registered in 2013 with the Securities and Exchange Commission. It’s currently what’s known as a "pink sheets firm," which means it’s in the same category as penny stocks, shell corporations and other less-than-savory investments…The valuation quickly disappeared under scrutiny, as OTC Markets made a "courtesy call" to its data vendor after CNBC called them.”
According to Investopedia, “”Pink Sheet” stocks are to be bought with caution.
“Investors should be aware of four cautions. First, most OTC stocks do not meet the minimum requirements for most exchanges and do not file with the SEC. Therefore, credible and reliable fundamental data are not available for analysis. Second, historically Pink Sheets stocks are penny stocks and are often near-insolvent companies. Third, some stocks are illegitimate shell companies set up to scam investors by issuing press releases, and having “analysts” promote the stock and issue more worthless shares. Fourth, Pink Sheets only has one requirement for a company to list – a company needs to have one market maker (broker) quoting its stock. The listing companies do not have to provide any financial information at all.
One common scam involving OTC investors is the pump and dump scheme where promoters buy penny stocks, promote and push up the prices for other investors and then dump their stocks while the late investors are stuck with worthless stock that they overpaid to own. These stocks are often promoted in spam emails or on message boards and blogs.”
Well that’s my stock market lesson and tip for the day!
Till Next Time,