Article: Meme stocks loom large in the CSA’s short-selling review

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Meme stocks loom large in the CSA’s short-selling review

James Langton, 22 March 2021

When a group of retail traders used Reddit to gleefully gang up on a handful of hedge funds in January, giving birth to the concept of “meme” stocks, they cranked up an already simmering debate about proper public discourse related to trading. In Canada, a consultation regarding activist short-sellers is the focus of that debate.

Late last year, the Canadian Securities Administrators (CSA) published a consultation paper on the role and regulation of activist short-sellers — traders who publicly air their negative views on the stocks they’re shorting.

Defenders of the practice maintain that vocal short-sellers are the only thing standing between unrelenting upside hype and ordinary investors — i.e., their skepticism and scrutiny help expose corporate fraud and misconduct, aiding naive regulators and investors alike. Continue reading “Article: Meme stocks loom large in the CSA’s short-selling review”

Article: Novagold says potential class action amateurish, ignorant

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Novagold says potential class action amateurish, ignorant

Cecilia Jamasmie, 10 July 2020

Canada’s Novagold (TSX, NYSE: NG), which is suing short-selling firm J Capital Research (JCAP) for defamation, said a US law firm’s potential attempt to launch a class suit against the company on alleged securities fraud would be based on “malicious and false information”. Lawyers at Hagens Berman and Portnoy said this week they were investigating whether Novagold had misled investors about the viability of its Donlin gold project, in Alaska.

Novagold said the move by San Francisco-based Hagens Berman appeared to be entirely based on JCAP’s “tapestry of deceit” as well as “false and misleading statements” about the company and its 50-50 development partner in the project, Barrick Gold (TSX: ABX) (NYSE: GOLD).
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Article: Novagold slams law firm for ‘malicious and false’ claims on Donlin gold project

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Novagold slams law firm for ‘malicious and false’ claims on Donlin gold project

Nahum Asher, 09 July 2020

According to the complaint, throughout the Class Period, Defendants misrepresented and concealed that (1) ACM Research’s revenues and profits were diverted to undisclosed related parties, and (2) consequently, the company materially overstated its revenues and profits.
Investors allegedly began to learn the truth on Oct. 8, 2020, when J Capital Research published a report entitled “Dirty business,” bringing ACM Research’s reported financials into serious question.
More specifically, J Capital concludes ACM Research is a fraud, over-reporting both revenue and profit. According to the report, “ACMR reports industry-beating gross margins of 47%” but “[w]e believe the real gross margins are half at the best.” J Capital also concludes revenues are overstated by 15-20%, undisclosed related parties are diverting revenue and profit from the company, the key means by which ACMR tunnels over-reported profit out of the company may be through about $20 million in overstated inventory and through cash that is inflated or compromised, and warranty and service costs are understated by at least $11 million.
Continue reading “Article: Novagold slams law firm for ‘malicious and false’ claims on Donlin gold project”

Article: NovaGold Investors: Company Investigated by the Portnoy Law Firm

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NovaGold Investors: Company Investigated by the Portnoy Law Firm

GLOBE NEWSWIRE, 09 July 2020

According to the complaint, throughout the Class Period, Defendants misrepresented and concealed that (1) ACM Research’s revenues and profits were diverted to undisclosed related parties, and (2) consequently, the company materially overstated its revenues and profits.

Investors allegedly began to learn the truth on Oct. 8, 2020, when J Capital Research published a report entitled “Dirty business,” bringing ACM Research’s reported financials into serious question.
More specifically, J Capital concludes ACM Research is a fraud, over-reporting both revenue and profit. According to the report, “ACMR reports industry-beating gross margins of 47%” but “[w]e believe the real gross margins are half at the best.” J Capital also concludes revenues are overstated by 15-20%, undisclosed related parties are diverting revenue and profit from the company, the key means by which ACMR tunnels over-reported profit out of the company may be through about $20 million in overstated inventory and through cash that is inflated or compromised, and warranty and service costs are understated by at least $11 million.
Continue reading “Article: NovaGold Investors: Company Investigated by the Portnoy Law Firm”

Article: NovaGold Lower Slightly After StreetSweeper Report

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NovaGold Lower Slightly After StreetSweeper Report

Benzinga, 07 January 2016

Shares of NovaGold Resources Inc. (NYSE: NG) were trading lower by more than 1 percent on Thursday following a negative report by The Street Sweeper on Wednesday. The Street Sweeper’s Sonya Colberg argued that while “there may be gold” in NovaGold Resources’ properties, investors “better not count” on the company “digging it out.”

Colberg noted that NovaGold owns 50 percent of 2 separate properties in Alaska (Donlin Gold) and Canada (Galore Creek). Meanwhile, the company is awaiting government approval for over 100 permits in its Alaska property while its Canadian property hasn’t seen any gold recovery despite numerous attempts since 2003. “Expected expenses are massive,” the report stated. ” The prospects are iffy. The risks are enormous. And the excavation route goes straight through investors’ wallets.”
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