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pennystockguy (97.13)

Warning to the CAPS community - How much work will a short seller go through to mislead you on CAPS? ZIXI

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March 23, 2011 – Comments (9) | RELATED TICKERS: ZIXI

So I am going through stocks looking for values as the overall market corrects and I have bought a few recent ones already. 

A stock I wanted to buy last Fall is back on top of my buy list radar.  ZIXI.  Interestingly, I avoided this stock last Fall because of the high number of recent red thumbs.

So I read the financial statements and some articles and I couldn't figure out how this stock could have 225 red thumbs???????

So I clicked on the scorecard tab of ZIXI and sorted by member rating.  I believe 215 of the 225 red thumbs are from CAPS players rated <20.  Not only that, virtually all of these red thumb CAPS players made a negative comment.  Not only that, virtually all of these red thumb CAPS players only have one pick on CAPS.  A red thumb of ZIXI.

Is ZIXI the fraud that this individual states they are?  Or is the individual who created almost all of these 200 plus accounts the real fraud?  ZIXI has a 10% short position and if you look at these ongoing red thumbs it appears that are short is underwater on his most hated stock.

Correct me if I am wrong, but if your thesis for shorting a stock is to create 100s of fake people bad mouthing a stock then wouldn't you be better served finding an actual company that is poorly run, shorting it and letting the stock run its course.

I just find this behavior odd and thought I would point it out to the community.  If you are going to go long or short a stock, you may want to see how many <20 players are pumping one way or the other

 

9 Comments – Post Your Own

#1) On March 23, 2011 at 2:32 AM, TMFUltraLong (99.98) wrote:

Ha... I didn't even realize Zix survived the market bubble in 2000. Back then I remember some Mickey Mouse analyst gave Zix a price target of $230.... he was off, by just a smidge...

TMFUltraLong

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#2) On March 23, 2011 at 2:36 AM, ikkyu2 (99.46) wrote:

Don't look at the red thumb count; look at the star rating.  It's heavily weighted towards CAPS All-Stars ratings (player rating 80+), really to avoid just what you're pointing out.  A million white beanies could red thumb a stock and not move its star rating at all, as far as I can tell.

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#3) On March 23, 2011 at 3:48 AM, rickdoom (99.32) wrote:

Wow... If not for all those bogus red thumbs, it looks like ZIXI would have a 4- or 5-star CAPS rating now instead of a 3. I would concur that most, if not all, of those <20 players with the solitary red-thumb pick are likely the same individual. Even more peculiar is the fact that they appear to span over the course of a whole year, going back to sometime around late '09.

I figure it's either a short seller who's losing a lot of money and too frustrated and/or stubborn to admit his mistake, or maybe just some crazed stock picker who's REALLY obsessed with "being right" on a call. In any case, this sort of calculated bear attack is a blatant disservice to the CAPS community and should be dealt with accordingly.

You may want to consider putting together a list of all of the suspect user IDs and forwarding them to a Motley Fool administrator. Hopefully, we can get these bogus accounts deleted from the system for good.

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#4) On March 23, 2011 at 7:31 AM, SultanOfSwing (99.80) wrote:

Could he/she be a disgruntled former employee?

CAPS should have a way of "filtering out" these kinds of inactive players (i.e., ones with a "time bomb" charm) so your rating reflects comparison against active players only.

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#5) On March 23, 2011 at 9:35 AM, TMFBabo (100.00) wrote:

It's true that all-stars count much more heavily, but 200 seemingly bogus no-names still have no place here.  I'm going to alert the team through the "contact us" tab and see what they have to say about it.

Thanks for the heads up, pennystockguy!

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#6) On March 23, 2011 at 9:40 AM, TMFCHarris (99.73) wrote:

ikkyu2 is right - there could be a thousand single-pick fake accounts, and it wouldn't move the rating a smidge.

Looking at the start dates on those picks, I'm impressed by their perseverance.  Creating one or two new accounts every day for a month, and coming up with new comments each time... impressive. Sad, but impressive.

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#7) On March 23, 2011 at 12:18 PM, EnigmaDude (97.72) wrote:

Interesting - I blogged about this same topic back in July 2010 asking if ZIXI is the most bashed stock on CAPS.  Seems like the bashing has only gotten worse since then!

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#8) On March 24, 2011 at 12:26 PM, simp08801 (< 20) wrote:

I looked back at those comments. They may be negative, but they are true.

It is true that zix has gone through 4 CFOs in just a few years.

It is true that the zix head counsel abruptly resigned/got fired last year.

It is true that zix is a one product company that doesn't offer spam protection, or virus protection, or malware protection or archiving and retrieval.

It is true that zix was sued by shareholders for fraud (they settled out of court).

It is true that zix refuses to correct their profile on many financial boards claiming that they still sell e-prescribe software (see e.g. http://finance.yahoo.com/q/pr?s=ZIXI+Profile)

 It is true that they couldn't even give away eprescribe and had to shut it down because there were no buyers.

It is true that zixi has had 3 toxic pipes.

 It is true that insiders are now selling zixi.

It is true that despite all of the evidence, zix claims they are THE leader in e-mail encryption, just like they used to say that they were THE leader in e-prescribing just months before they announced the shut-down.

It is true that Google gmail offers free e-mail encryption.

It is true that zix lost a legal battle to VISA.

I think most of the reason for the high CAPS rating is historical- back from the days when zixi had eprescribe. Just look at the old comments.

 

 

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#9) On March 27, 2011 at 11:21 PM, bubabar (< 20) wrote:

You may want to check out the Yahoo message boards for ZIX. I believe its the same guy on both sites.

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