Another Lemon Falls from Citiron Research: (BIDZ) Bidz.com
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BIDZ is a one of kind. The Citron report is worth reading just for the story. BIDZ should make a 60 Minutes story easy.
"BIDZ largest supplier for years has been LA Jewelry, owned and operated by Saied Aframian, who also happens to be one of BIDZ largest shareholders. Not surprisingly, LA Jewelry is also BIDZ largest creditor, and a large participant in BIDZ co-op advertising program. These “related party” transactions are all over BIDZ financials including:
Over $5.3m accounts payables to a related party (nearly 20% of AP)Purchase of 11.6% of its merchandise from a related partyParticipation in co-op marketing (12%) by related partyGuarantee agreement with the same party related for “minimum profit” on inventory purchased from the party.The related party owns 1,228,000 shares of BIDZ’s stock.
Saied Aframian is a convicted felon and has served time in the Federal System for fencing stolen goods. Not just petty crime either, but for being the prime fence for a multi-million dollar nationwide ring of stolen watches and jewelry."