Stocklemon Reports on iMergent, Inc. (Amex:IIG) Part 5
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“I never give them hell. I just tell the truth and they think it’s hell.” Harry S. Truman
The More Things Change, The More They Stay The Same
In 2002, NBC Dateline TV produced an expose on Storesonline (formerly Galaxy Mall). In that feature, correspondent Chris Hansen exposed, among numerous manipulative and deceptive sales practices, how Storesonline publicized a glowing “success story” endorsement of its product by a “customer” — without disclosing that the person in question was the CEO’s daughter.
Nothing Has Changed.
Stocklemon Updates on Imergent Inc. Part 3
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“You can’t cheat the public for long”
Tennessee Ernie Ford
In the first two reports on Imergent, Stocklemon described the foundation of a company that rests on a house of cards. Their “unusual” balance sheet combined with a business model of luring people into Internet Cash Flow Workshops makes this company the Lemon of 2005. In this report, Stocklemon will review the charges made by the Attorney General of Texas and show the strength of the case. Furthermore, Stocklemon will go into more detail about the background of the CEO Don Danks.
Stocklemon Updates on Imergent Inc. Part 2
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“The truth is on the march, and nothing shall stop it” Emile Zola
Everything Imergent (AMEX:IIG) Does Not Want You To Know.
In the face of charges of deceptive and misleading representations and business practices in the State of Texas, First Albany hosted a “damage control” conference call to allay investor concerns over the business of Imergent. This report will show how Imergent is not a software company, but rather peddles a “get rich” scheme — a business model that is a house of cards.
The Attorney General of Texas is Wrong click here
The Attorney General of the State of Washington was Wrong click here
NBC Dateline TV is Wrong click her
Forbes Magazine is Wrong click here
The Better Business Bureau is Wrong click here
The California Dept of Corporations is Wrong click here
Hundreds Of Customers Complaints on the Internet are Wrong click here
Newspapers from around the world are Wrong
TV News is Wrong
But only you, the peddler of Secret Hair, CigArrest and now Internet Cash Flow Workshops….you are RIGHT.
THE COLD HARD TRUTH
During the Conference Call, Danks says, “We sell to the very small business market. There’s 10′s of millions of these. We see a couple hundred thousand small business owners every year.” THIS IS A LIE!
Imergent sells to people who are in a low income bracket by offering a free breakfast. The company then puts on the sales pitch painting a vision of internet riches in order to get these people to attend the second seminar. At the second seminar, the high-pressure sales dudes cheerlead their “customers” to buy these packages from Imergent and Storesonline that average from $4,500 to $5,000.
In order to prove Stocklemon’s point about Imergent preying on the weak and desperate, we refer to a statistic offered up in the conference call. Mr. Danks stated that about 1/3rd of Imergent credit customers have a credit score of 620 or better.
The average credit score in the US is a 677.+
Therefore, a large percentage of their customers have lower than B credit and are considered bad credit risks. These are not small businesses as Mr. Danks would have us believe, rather these are low income families being sold a dream.
According to their most recent SEC filing:
“For more than six years the Company has offered its customers the payment option of a long-term installment contract and has a history of successfully collecting under the original payment terms without making concessions. During fiscal years ended June 30, 1999 through 2004, the Company has collected or is collecting approximately 70% of all EPTAs issued to customers. Not all customers live up to their obligations under the contracts. The Company makes every effort to collect on the EPTAs, including the engagement of professional collection services.”
Is a 70% collection rate successful for a software company? NO CHANCE! It is the last line that gets to us the most. The company makes every effort including the engagement of collection services. We have read too many documented cases of Imergent ruining the credit of many a single mother of recently laid off person in order to keep their “spectacular” 70% collection ratio.
Look at the RSVP page for one of their seminars. Note the tag line, “This 90- Minute Even is the Premier Wealth Building Conference in the Country Today!” http://www.inetseminars.com/index.html
IS THIS A SOFTWARE COMPANY ???????????
WHERE IS THE 8-K?
Imergent filed an 8-K with the SEC to announce their conference call with First Albany. Incredibly, they never filed an 8-K to disclose the investigation and lawsuit by the Texas Attorney General! This was the sole reason for the hastily convened conference call! And they still have not filed one!
Regardless of how this turns out in Texas, the company had a responsibility to inform investors of this lawsuit. The stock subsequently sold off 30% before the company even acknowledged the suit (obviously Wall St. found this news to be material.)
Stocklemon believes that the company’s failure to disclose could and will result in a shareholder lawsuit in the future.
Insider Sales
Insiders of the company sold MASSIVE amounts of stock (over $5 million worth) earlier this month in the days immediately preceding the lawsuit from the Texas Attorney General – at prices nearly 50% higher than Imergent trades today. Did they have forewarning of this lawsuit or was it dumb luck? Stocklemon believes this question should be pursued to an answer by those with subpoena power.
More Complaint Reading..for the hell of it
http://www.sltrib.com/business/ci_2587241
http://klausdahl.com/forum/viewtopic.php?p=5874
http://www.netsenseonline.com/storesOnline.html
Conclusion
There is nothing more that Stocklemon can say that has not been said by the good people who line the trail of broken promises and dreams created by Imergent. The business model is a joke, the balance sheet is a joke, the management is a joke, the analyst is a joke .. unfortunately, the money lost by gullible customers is real. Cautious Investing To All.
Disclaimer- The principals of Stocklemon currently hold a short position in Imergent Corp.