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AEHI Under Attack By Some Interesting Characters
It has now become apparent that one of the most creative companies we’ve found in the energy business is under attack – an attack that most would consider disgraceful.
AEHI became a public company just a few years ago in an attempt to raise capital to build a nuclear power plant in Idaho, which is now reaching the end of the local approval process. Opposition to that plan fell on a very small group of anti-nuclear and anti-development activists known as the Snake River Alliance, and a few people outwardly associated with the group.
Most of their attacks have been relegated to the blogs and chatter between other like-minded opponents on the internet. But most recently the SRA seems to have found an advocate from a couple websites that have become well known for writing up penny stocks. We just wish these articles took both sides of the story into account.
As one example, there was a recent, overly negative article about AEHI published by a firm known as The StreetSweeper. The article uses a series of negative quotes about AEHI stemming directly from its opposition. The Streetsweeper claims to expose corporate fraud. Its slogan is "we uncover the dirty little secrets that investors need to know."
The Streetsweeper’s report on AEHI uses extremely negative quotes from the company's opposition and addresses matters in regards to AEHI's CEO, Don Gillispie and his personal life that have absolutley nothing to do with how he runs a company. These issues involve who he may or may not be dating to what kind of car he drives.
This article was clearly written with the intent of casting a dark cloud over, from what we can tell is, a reputable company. It may just be a case of the reporter of the article receiving information from a very disgruntled source.
This company has experienced tremendous success in the market place thanks to positive developments and strong leadership from its CEO, Don Gillispie.
Alternate Energy Holdings, Inc. (OTCQB:AEHI) is a company we have followed very closely over the past two years with great intrigue as the concept behind it could prove revolutionary in the energy business. To be frank, we’ve never come across a public company of its kind. Imagine an independently-owned power producer using nuclear and renewables to offer affordable energy solutions at a time when some of our biggest producers of power are dwindling due to environmental concerns. Because of its independence, AEHI has the potential to raise the money to build plants; they don’t have to rely on rate payers, which only increase the cost of power. It’s an investment opportunity we wanted to be involved with upon completing our due diligence. No doubt, this company has lofty goals, and it won't be a walk in the park. It is a penny stock after all and they come with tremendous risk.
Our crew thoroughly investigated AEHI and every person on AEHI’s Board of Directors - and by the way, so has the U.S. Government (as some of these people work prominently in the nuclear industry) and many international governments; many that have an interest in the work AEHI is accomplishing with renewable energy, nuclear power, mini reactors and nuclear desalination. Just look at the pedigree of its management (http://www.alternateenergyholdings.com/management.aspx ).
With over 45 years of experience in construction, operations and maintenance of nuclear power plants, AEHI’s CEO, Don Gillispie, is someone we were willing to bet on when we invested in this company.
Gillispie received his undergraduate degree in electrical engineering at Clemson University, where he graduated cum laude. He later completed the senior executive program at the MIT Sloan School of business.
Gillispie has served in a number of positions in the nuclear industry. He worked on the startup of Beaver Valley Unit 2 in Shippingport, Pennsylvania. He worked on the construction and startup of Duke Energy’s first three nuclear units at Oconee Nuclear Station in South Carolina. While working for Tennessee Valley Authority, Gillispie was involved in the construction, startup and operations of three nuclear facilities. And while working with the Institute of Nuclear Power Operations he was a manager of engineering and director of restart respectfully for the turnaround of the Rancho Seco and Pilgrim nuclear power plants.
Gillispie helped found a cornerstone program for the Institute of Nuclear Power Operations (INPO), which is the safety watchdog to all U.S. nuclear utilities. He also helped startup the Nuclear Management Corporation (NMC), a nuclear operating company in Wisconsin, which operated up to eight nuclear power plants with 5,000 employees. Incidentally, NMC was awarded best in class by Forbes.com in 2001. And as owner of Grace Glens, a private nuclear-technical management consulting company, Gillispie consulted with some of the largest nuclear utilities in the United States, advising senior executives on commercial nuclear power operations.
As part of a three-man executive team, Gillispie assisted in overseeing the 2007 reopening of Browns Ferry Nuclear Plant unit three in Alabama before moving to Idaho to be near AEHI's first nuclear project. Its reopening was attended by President George W. Bush.
Would you say that’s an impressive background?
Unfortunately, Mr. Gillispie and AEHI's reputation have been tarred by the article titled “Alternate Energy: Power Stock or Toxic Waste?” (published on October 4th 2010).
Full disclosure time: We are proudly bias when it comes to AEHI and own shares in the company. They also are a paid advertiser on PinnacleDigest.com. What does that mean? AEHI pays us a small cash fee to have their press releases featured on our website, in our newsletter and we further disseminate its news. In no way does AEHI being a paid advertiser require us to write this article. We are writing this article to defend a company from a negative, misleading report written about it.
As shareholders who clearly know much more about AEHI than the author of this unfortunate article, we felt compelled to write our side of the story. We’ve been following AEHI for roughly 2 years and researched it for over 6 months before buying a single share.
Since the article “Alternate Energy: Power Stock or Toxic Waste?” was published it has gone viral on the internet and AEHI’s shares have fallen significantly. On October 4th AEHI’s shares hit a high of $0.86. Since the article was published that same day its shares have dropped as low as $0.64. It’s amazing what overly negative words can do to a company’s share value in a very short period of time. Due to the significant drop in share value, we managed to buy more shares in the company today at much cheaper prices than it has been trading at over the last few weeks.
What we found peculiar about this whole situation was the dramatic short interest taken in AEHI in the last few weeks of September. Below is the short interest chart for AEHI provided by otcmarkets.com:
(click image to increase size)
Look at the dramatic increase in the short interest building up on Sept 15th and then hitting almost 2 million on September 30th...
Melissa Davis, the author of the report, does state clearly in her disclaimer “No member of TheStreetSweeper’s staff or advisory board has ever taken a financial position in AEHI or received any compensation from others who have positions in the stock. As editor of the site, Melissa Davis will never take a position in any of the stocks that she covers. To contact Ms. Davis, the author of this story, please send an email to firstname.lastname@example.org.”
We commend her for that as she is not trying to gain from her articles.
Although Melissa Davis has not taken a short position in AEHI, it wouldn’t be the first time that others have used negative articles to make a profit from shorting a stock.
According to Cary Spivak, from the American Journalism Review, shorting stocks before negative reports are published is not a new practice. Spivak writes:
“At first the idea didn't feel quite right to Christopher Carey.
On the plus side, the idea of creating a Web site dedicated to investigating business and securities fraud seemed to be the perfect escape route from the newspaper business for the St. Louis Post-Dispatch reporter. Teaming up with Mark Cuban, the controversial owner of the Dallas Mavericks and cofounder of HDNet, would give the new site instant recognition.
It all seemed perfect — except, that is, for Cuban's unconventional financing idea. The self-made billionaire proposed trading the stocks of companies that Carey investigated. Not only that, Cuban was going to short the stocks before the stories were posted, meaning he would effectively place market bets that the value of the stocks would plummet.”
In that same article by Cary Spivak, titled "Short on Ethics?", it includes The Street Sweeper (thestreetsweeper.org), reporter Melissa Davis and Hunter Adams, the brains behind The Street Sweeper.
Spivak reports, Adams “…helped launch the site last year, just eight years after federal prosecutors labeled him an associate of the Gambino crime family in New York. Adams, who was convicted for his role in a massive ‘pump and dump’ scheme involving penny stocks, is still on federal probation for his crime.”
Spivak says many sites have begun writing outwardly-negative articles about a company to drive down its stock. Prior to the article’s publication, they short sell the stock and then make huge returns almost immediately.
According to Spivak, nobody connected with The Street Sweeper is shorting the stocks it investigates, though neither Adams nor Melissa Davis, the site's editor/reporter, rules it out. "We have left the door open for that possibility," Adams says. "I see nothing wrong with it, as long as it's legal and properly disclosed."
AEHI is recovering from the articles’ damage, but this experience has increased the need to shine a spotlight on this issue. If proper, two-sided research is not conducted by some of these reporters, the damages to investors can be catastrophic.
Streetsweeper.org promotes themselves as do-gooders in the stock market, exposing fraudulent companies. If they are exposing truly fraudulent companies then we commend them for that, as this type of research is needed these days; however, we are furious with what has occured with AEHI as there is no proof that it is a fraudulent company.
Just because a stock price has increased an exceptional amount doesn’t make it a fraud. What one must remember when investing is that the stock market works on projected values 6 to 9 months in advance. People are allowed to speculate.
In the meantime, a company like AEHI is left to picking up the pieces and explaining what happened to its investors. It’s not right.
Since this article was released we have been in contact with AEHI, as many of its shareholders have, and learned that the company is considering legal action against Streetsweeper.
We’ll keep you posted on this unfortunate and costly situation. Thankfully, as we conclude this article, AEHI’s shares are mounting a comeback.
One final note, and perhaps the most important. The CEO of AEHI has publicly stated that “Recent insider purchases and the fact that neither I, our CFO, board members, nor any officers who have day-to-day line responsibilities for running the company have sold a single share since the Company’s inception speak to our strong confidence in the outlook for the business.” He went on to state “Near-term, we anticipate two important catalysts for our business: the anticipated final local approval of our nuclear power plant site in Payette County; and the potential sale of a nuclear desalination plant to one or more overseas buyers.”
All the best with your investments,
Development since publication (December 16, 2010): http://www.sec.gov/litigation/litreleases/2010/lr21783.htm
Disclaimer: Please read carefully before proceeding.
Alternate Energy Holdings Inc.(AEHI) has paid us a cash fee of $150 per news release to display its news on our homepage and in our newsletter and we also disseminate its news via our affiliate news wire service. PinnacleDigest.com employees have bought shares in Alternate Energy Holdings Inc. We intend to sell every share we have purchased and may purchase in the future of Alternate Energy Holdings for our own profit. We may sell every share we own in Alternate Energy Holdings without notice to our subscribers. We have sold shares of Alternate Energy Holdings for our own profit in the past. We may purchase more shares in Alternate Energy Holdings without notice to our subscribers. At the time this report was published, PinnacleDigest.com employees owned shares in Alternate Energy Holdings.
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AEHI is a development-stage company that poses a much higher risk to investors. When investing in speculative stocks of this nature, it is possible to lose your entire investment over time. AEHI is not a suitable investment for everyone.
Be advised, PinnacleDigest.com and its employees are not a registered broker-dealer or financial advisor. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer.
All statements in this report, other than statements of historical fact may be forward-looking statements. These statements relate to future events or Alternate Energy Holdings' future performance. Forward-looking statements are often, but not always identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.