Last month, we reported that penny stock king Timothy Sykes was in a legal spat with basketball star Shaquille O’Neal over an alleged pump and dump scheme involving NXT Nutritional Holdings Inc. (NXTH).
Shaq’s legal team sent a cease & desist letter to Sykes over the allegations. Tim’s posted a lengthy response which we’ve printed below. For his legal response, that lengthy piece can be found on Sykes’ website.
And as for NXTH, take a look at the graph at the bottom and make the call for yourself.Timothy Sykes: On February 12th I received a cease and desist letter from Shaquille O’Neal’s attorney thanks to my February 7th, 2010 post exposing the paid promotional mailer that cost more than $300,000 which used Shaq’s name and image to get readers excited about the prospects of NXT Nutrtionals Holdings Inc. (NXTH)…I said the stock looked very much like a pump & dump…which are my stock and trade as I have 4 newsletters and 10 instructional DVD packages teaching roughly 3,000 DVD customers and TIMalert subscribers in over 36 countries how to identify and profit from them, legally, mainly by short selling their stocks when their prices are “pumped” higher by promotional mailers exactly like the one sent out on NXTH.
Furthermore, as I detail in my bestselling book An American Hedge Fund, using this exact strategy, I have turned $12,415 into $1.65 million while still in college, become the #1 ranked short bias hedge fund manager 2003-2006 and now have been the #1 ranked trader out of 45,000 on Covestor the past 2 years by turning $12,415 into $120,000, detailing every single trade/step of the way even as I spend most of my time blogging and teach others.
In short, I know this shit inside and out and Shaq, whether he knows it or not, just stepped in this big pile of shit. My pile of shit. Welcome to the gutter big boy.
In an attempt to be fair, I even took a poll asking you readers whether NXTH looked like a pump & dump and out of 289 votes, 249 agreed with me…
One day after raising $5.6 million, NXTH’s stock is collapsing another 29% today to just 77 cents/share…an astounding 76% drop from the $3.22 highs created by the promotional mailer just under one month ago…take a look at the chart and see EXACTLY when the volume and stock price began perking up on the first day of February 2010, when the mailer went out…coincidentally the very day Shaq COULD start selling 20,000 shares per day…very questionable:
My Response To Shaquille ONeals Cease & Desist Letter: Shaq vs. The Truth
We don’t know, nor will we probably ever know (unless Shaq brings this to court…I dare you to do it you big bully) whether he sold any of the million of shares which he was compensated to be spokesperson for NXTH, but the term “pump & dump” doesn’t necessarily refer to individual selling into runups, often times companies use their inflated stock price to do financings EXACTLY like this so while I won’t go so far as to say this is definitely a pump & dump (I changed the old blog post to “alleged” and just put alleged in front of everything I’ve ever said about this company), yesterday’s financing and today’s stock price collapse continues to fit the mould of every other pump & dump of the past 20 years.
Anyway, here’s my response letter to Shaq’s cease and desist request…I could’ve easily taken down my posts and went onto exposing other paid promotional mailer stocks, but when I have sourced all my material and it’s all factual and it’s Shaq’s fault for getting involved with such a questionable company, I will not back down.
Shaq I ain’t afraid of you, I DARE you to bring this to court, I’ll blog and LiveStream the entire proceedings in a series I’ll call “Shaq vs. The Truth”…and I’ll probly win every publishing award available….so please do it.
Enjoy the education Shaq, Shaq’s lawyers and you readers:
PS Shaq, time to get better lawyers, my 5 month old Yorkie puppy knows egregious is not spelled “aggredious.”
And as promised, here’s a chart of NXT Nutritional since its inception: