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[Update1] Geeknet GKNT Shares Tumble as GKNT Fails to DIsclose Geek.com divestiture to Ziff-Davis and iCade Launch while GKNT Insiders are Awarded Massive Bonuses During Alleged Trading Blackout Period. Selective Disclosure?

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January 15, 2011 – Comments (1) | RELATED TICKERS: GKNT , BBY , AMZN

[Update1] Geeknet GKNT Shares Tumble as GKNT Fails to DIsclose Geek.com divestiture to Ziff-Davis and iCade Launch (5) as GKNT Board of Directors Officers Awarded Massive Bonuses (1,2,3) During Alleged Trading Blackout PeriodSelective Disclosure?

Geeknet GKNT shares have tumbled considerably since management has still not fully disclosed / gone public with its Geek.com divestiture to Ziff-Davis reported here January 02, 2011. On January 03, 2011 the GKNT Board of Directors were awarded $499,775.44(1) in Bonuses not based on performance / GKNT earnings. And contemporaneous with its insider options issuances on January 7th Geeknet also did not disclose its alliance with Atari and IONaudio with its iCade iPad Gaming Arcade for release April 2011.

On December 14, 2010, 17 days before Q4 ending 2010, Geeknet (GKNT) President, CEO of Media and President, CEO ThinkGeek were awarded $4M (2) in bonuses (3) not tied to performance amidst consistent patterns of continuing losses, and worsening eCommerce gross margins.  What is Kenneth Langone thinking?

Massive bonuses not based on performance + non-disclosure of Geek.com divestiture + non-disclosure of iCade strongly suggests Q4 was a disaster (TK-421?) and Geeknet is holding news to obfuscate their q4 numbers..imoo. SourceForge nka Geeknet has been street and non-insider shareholder hostile since Scott Kauffman became CEO. This did not make sense and drew fire starting with the Trivium Capital Hedge Fund. But it continues under Kenneth Langone arguably suggesting Langone and his partners have been enforcing/dictating this Street and non-insider hostile strategy all along. Alleged consistent patterns of Selective disclosure , and or alleged violation(s) of Insider Trading Sanctions Act, Sarbanes-Oxley, SEC Rule 10b-5 (Reliance, Causation...) during GKNT's trading blackout period (In Re: Q4/FY 2010 numbers (6))?

11 Jan via web @scollison Scott Collison

"Great Geeknet Media sales meeting in New York. Lots of smart, motivated people. I'm feeling very good about the future of the company! (tweet © 2011 Twitter)

Comment:  Scott became excited about the future after his $2M bonus? ...and what about ohloh.net (2, 4, 5, i, ii. iv),  geek.comslashdot.org*, feedery (5)...Q4 2010? oooops....#FAIL #FTW 

and lastly...ripped from the off-Broadway play, SourceForge discovers its inner-Geek. [Scott Collison played by Wally and Kenneth Langone and Matt Carey played by The Beaver].

"Gee Whiz Beav, I'm feeling really swell about 2011."

"That's great Wally, here's a $2 million bonus!" EBITDA EBITDA EBITDA.....THAT'S ALL FOLKS!

__________________________

(1) Geeknet Board of Directors Awarded $499,775.44 in bonuses not based on performance / GKNT earnings.

Bonus Awards Transaction Date per SEC FORM 4, 1/3/2011, Closing price 24.39

Kenneth G. Langone, 2459 shares, Award $59,975.00

Andrew Anker, 2049 shares, Award $49,975.11

Matt Carey, 2459 shares, Award $59,975.00

Peter A. Georgescu, 2049 shares, Award $49,975.11

Robert M. Neumeister, 2459 shares, Award $59,975.00

Frank A. Riddick III, 2459 shares, Award $59,975.00

Derek V. Smith, 2049 shares, Award $49,975.11

Michael Solomon, 2049 shares, Award $49,975.11

David B. Wright, 2459 shares, Award $59,975.00

(2) Based on the closing price of Geeknet (GKNT) on December 14, 2010 ($25.89). Form 4 Scott Collison filed December 16, 2010 (78,125 shares). Form 4 Caroline Offutt filed December 16, 2010 (78,125 shares).  These awards were made while Geeknet is sustaining continuing losses and cash drains while Thinkgeek's gross margins have further eroded from 15.74% for the nine-months ended September 30, 2009 to 12.03% for the nine-months ended September 30, 2010. Source: Geeknet SEC 10-Q for the period ended September 30, 2010. 

(3)  Matt Carey, CIO (NYSE:HD), GKNT Director and Member of GKNT Compensation Committee awarding said bonuses. Kenneth Langone, Chairman, GKNT.

(4) "...We have long held SourceForge in high regard," said Scott Collison, CEO of Ohloh. "We are eager to combine our skills and insights with SourceForge's credibility and reach in the open source ecosystem and look forward to joining the SourceForge team...". Never happened, ohloh was dumped as an asset sale under Scott Collison's leadership as an officer of Geeknet after and after cashing out with the SourceForge May 2009 acquisition. (See SourceForge wants to be collaboration powerhouse, buys Ohloh)

(5) Note: Geeknet disclosed feedery pursuant to a formal press release (full disclosure) on November 16th 2010 but not its divestiture of Geek.com nor its iCade alliance with IONaudio and Atari.  Selective disclosure

(6) Geeknet (GKNT) FY 2010 and q4 numbers ending December 31, 2010 are projected to be reported Monday February 07, 2011 18:00 (ET) as reported by Daily Finance.

Updates:  Jeffrey Chalmer*s, Controller, disappears from Geek.net home page around January 12th. He formerly appeared here (through the back-door, may not be here long)...geeknet_Inc hasn't tweeted since November 8th (including its Facebook presence), so much for SourceForge's nka Geeknet grand "Geek" marketing strategy of capturing geek market share...only to dump Geek.com, (after dumping Linux.com and ohloh.net) arguably their strongest media asset, and namesake. Note: Geeknet even made a video to prove they were Geek's [None of the Corporate Overlords in the video are now with Geeknet].

References:

i.  (November 03, 2010)  [Update1] Langone, Geeknet (GKNT) Q3 numbers Disappoint, Management overviews on Conference call Embarrassing...Reverse Split Effective November 10th...Langone's UFI effected 1:3 reverse split today...Story Developing...

ii. (October 16, 2010)  [Update2] Geeknet (GKNT) Announces Sale of Ohloh.net to Black Duck Software. What's Next for SourceForge.net and Slashdot.org?

iii. (August 27, 2010) Breaking...Exclusive...News...GKNT Shareholders Allege Blatant Violations of Insider Trading Sanctions Act of 1984 by CFO, Former CMO, Former CTO...Story Developing...Note: All Officers cited in this article are no longer with GKNT.

iv. (February 20, 2010) What/When are the Minds Behind ohloh.net Doing to Turn Geeknet (LNUX)s World Class Open Source Assets Into Something Extraordinary...into a Viral Loop?

1 Comments – Post Your Own

#1) On January 15, 2011 at 9:02 PM, gnulaw (53.96) wrote:

Geeknet announced its acquisition of Geek.com eight months ago...so why isn't its divestiture disclosed? Note: Geeknet's CRO, Matt Sweeney, led the divestiture of Geek.com to Ziff Davis. "...Most recently, Matt was President, Sales and Marketing for Ziff-Davis Enterprise..." - Geeknet

 ...so what's that all about?

 

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