Thursday, 13 March 2014

Bitcoin miner listed and ramped on ASX

After ASX-listed scams run out of money, their shell can be used for another scam, with this process repeated ad infinitum and ad nauseam. It has now become standard practice for failed Australian companies to announce a splendid scrip acquisition immediately followed by a ramp. Naturally, the sudden ramps of these previously illiquid and unheralded companies is entirely engineered by related parties of the operators, it has absolutely nothing to do with a "market" outcome.

Macro Energy Limited (MEJ.AX), previously known as Verus Investments Limited, is an investment company that has a long proud track record of destroying shareholder value. Its latest half yearly report discloses remaining assets of around $3.5m, predominantly in cash, and 218m shares outstanding. Today MEJ announced it is acquiring Digital CC Holdings, which through its subsidiary digitalBTC engages in vaguely described operations involving bitcoin mining and trading.

The scrip acquisition of Digital CC is to be accompanied by a share consolidation, a $9m capital raising, and share options to insiders. Following the announcement, the scheme operators immediately ramped the share price of MEJ by 50%. The ramp had nothing whatsoever to do with the "market", it was a predetermined planned outcome for the illiquid share. On the previous trading day, 9000 shares of MEJ were traded on the ASX at around $0.026, for a daily trading value of around $230.

Revaluation ramps such as these have not only come to be condoned, but to be expected as part of the market. Little is known about the actual operations of digitalBTC, but what can be said with certainty is that the company is controlled by criminals who without compunction manipulate "market" prices. This in and of itself should be enough to disqualify such schemes as investments. But in Australia scamming is an accepted way to make money, as long as you succeed at it. The head of digitalBTC made his money from various adult entertainment and horoscope SMS frauds, yet is still hailed as a paragon of entrepreneurship.

These scams did not provide promised services, made it hard or impossible to unsubscribe, were deliberately deceptive about costs and made unauthorized charges.

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