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Basin Water: The lesson of the 5-minute stink test



May 16, 2007 – Comments (5)

Ugh. Anyone out there bother to check up on the CEO at this outfit? I mean, it already made no sense at 5x revs, especially given the nature of that business, which is full of strong competitors.

And since when does it make sense to go public to get cash, then immediately use it to turn around and buy shares. (Unless you know the sheeple out there believe that buybacks are always a sign of good management. In fact, these days, they can be an indicator of management looking to game a sagging stock...)

But how come Jensen's previous bankruptcies (not to mention far more troubling biz ties) didn't make it into any of those hot caps pitches?

See my pitch, y'all, forget the hype about the water biz (Jensen used the same kind of short-sighted buzz back in the day to get people to by his predecessor company's gold pitch), and change your thumb to down.

5 Comments – Post Your Own

#1) On May 16, 2007 at 10:21 AM, pennysplants (99.17) wrote:

Whoaa! Thanks for the heads-up ! Missed this entirely.

I always take your "smell-tests" seriously ... especially for real money.


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#2) On May 16, 2007 at 11:39 AM, tomnsung (51.02) wrote:

Uh-oh!!!   Thanx for this valuable info.   Does this smell like Pegasus Wireless?

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#3) On May 16, 2007 at 12:52 PM, TMFBent (99.57) wrote:

heh. Nothing smells quite like Pegasus, but to bet on Basin, i think you're betting against a couple of very persuasive realities.

1) Management with a history of ineptitude or worse.

2) An already overpriced company in a business against tons of better-equipped competitors. (They're just filtering water, folks. People have been doing it for ages.)

The question would-be investors need to ask is: Why would anyone assume that a guy who ran a scammy-looking gold company-turned bankrupt water outfit to have a competitive advantage? My guess? He don't. But he's got a story, and everyone's swallowing it.

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#4) On May 16, 2007 at 2:33 PM, TMFPencils (99.85) wrote:

You da man, Seth. I'm glad you found this before it killed my CAPS score. ;-)

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#5) On May 16, 2007 at 3:11 PM, TMFBent (99.57) wrote:

Hey, it might kill MY caps score. I think these guys are lousy, but that hasn't stopped many stocks from going to the moon anyway.

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