“FINRA whistles the play dead”, The MMTLP Winners and Losers

Crank up your HBOMax app, or borrow a friends account and watch “Gaming Wall St“, if you need background on the reddit by the name of wallstreetbets that has gone viral among common folks who dabble in stock investments. Whether you agree or disagree with the concept of people banding together to share trade information and investing as a group, or not, its happening all over the world. For example, for people interested in trading in FOREX markets, there are paid subscriptions where people join conference lines and invest in calls or puts against currency pairs, real time, based on an expert’s educated guess shared on the conference line. Its foundational that when you plan to invest in anything, you want to be able to weigh the risks and potential gains. In a society of impatience, people are willing to lean on the expertise and research of trusted sources, even if those sources are sources by association. Kindergarten games teach us, the further away from a personal connection to the true source, the less likely your information is credible, yet the daring members of wallstreetbets stay the course and sometimes risk it all on opportunities to win big. The publicly traded security Meta Materials Preferred Shares (MMTLP) had a unique and tremendous upside, because the company submitted documentation, signaling they were going PRIVATE and giving trade of the security a hard stop date of 12/12/2022. This setup the uncommon environment for an inevitable short squeeze. However, to the surprise of many investors, MMTLP wasn’t available for trade at all in the pivotal last days of trade. I guess I have to give you a little back story on MMTLP before I get into winners and losers.

Torch Light (NASDAQ:TRCH) was a stock that some in the wallstreetbets group speculated would grow massively last year. The company was acquired by Metamaterial Inc, and the symbol was converted to MMAT and a number of MMTLP preferred shares were awarded to any current shareholders of TRCH in the process. Anyone still holding these shares or still paying attention learned that, this year, the company filed documents with the proper trade authorities, committing to going PRIVATE. When a publicly traded company decides to spinoff and go private, all investors must close positions before the deadline given, or the respective brokerages will have to forcefully close the positions themselves to balance their books. This isn’t unusual, MMTLP is not the first company to spinoff, and they won’t be the last.

What I found to be blog worthy about this particular situation is the unequal treatment of individual investors in comparison to hedge funds. After word was given that MMTLP would be going private, hedge funds were given continued authorization to short sell this security. When you short a stock, you are basically loaned someone else’s shares to sell immediately receiving the cash, with hopes and expectation that the price of the stock will fall. Then you can buy back the loaned amount of shares and keep the difference. How hedge funds were allowed to do this, while at the same time, some brokerages weren’t allowing MMTLP to be purchased at all by the public is perplexing. According to some in the wallstreetbets group who claim to have credible sources, the security was shorted well beyond the amount of shares that exist. When a company is heavily shorted, there is a simulation of low investor confidence. The price of the stock dips because so many shares are being sold in a short amount of time. Ask yourself why would a hedge fund be allowed to do such a complex transaction, if the average Joe couldn’t even do simple transactions like buying on the same symbol?

With the hard deadline for the MMTLP spinoff approaching, countless shares of the security would need to be bought back by the hedge funds to close their short positions, which was set to send the price of the security soaring, or as wallstreetbets members say, “to the moon”. FINRA, “the powers that be”, decided to do what some unpopular referees do in American football. In the NFL, if a player fumbles and the opposing team picks up the ball, and runs in for a touchdown, the play can be reviewed, and depending on the video review, the defensive team can be credited for 6 points, or the ball can be placed back at the yard-line of the fumble if the offensive player was found to be “down by contact” post-review. In hindsight, they can get the RIGHT call and proper outcome with the help of review. However, if the referee whistles the play dead, the defensive team never has a chance to run the ball in for the touchdown, and the best possible outcome for the defensive team is never realized. Even if the defensive team’s coach challenges the call and it turns out that the offensive player really fumbled the ball, the defensive team never gets that moment of open play to score again. In a situation where there was a clear path to the end-zone, defensive teams often feel like losers, even if they are awarded possession, because of the opportunity to score they were robbed of.

FINRA whistled the play dead. Instead of allowing the living breathing markets to balance themselves, and the chips to fall where they may, the markets were trifled with by FINRA, and MMTLP was administratively and prematurely taken off the market on 12/09, days before the deadline. Investors never got to see just how many shares hedge funds needed to buy to close their short positions, and never got to see what that demand would have done to the price of MMTLP. The settlement of the shorts was handled under the table and off the books, mafia style. A hedge fund would have had to close its short positions and depending on how reckless the hedge fund had gotten with MMTLP shorts, the event may have wiped them out completely, causing any other stocks to dip, if in the proverbial blast radius that is said hedge fund’s portfolio. As the price of MMTLP went up, investors would have had the opportunity to sell their shares and reap the benefits of stock purchases at prices that some had waited over a year to see. Reports of suicide attempts and devastation for the people who were deemed less important than hedge funds by FINRA have rang out all over twitter and reddit. Are some hedge funds “too big to fail”? If so, shouldn’t the risks they’re allowed to take be regulated?

In this NFL analogy, FINRA is the referee, hedge funds are the offensive team, the winners, who fumbled the ball, and everyday investors, like the people in the wallstreetbets community, are the defensive team, the losers, who recovered the ball and looked to score before the play was blown dead. The unknown actor is the defensive team’s coach. Who challenges the ruling on the field? The damages are unknown since trade was stopped, but it is no question the ball was in the hands of the real shareholders of MMTLP, and they deserve more than Next Bridge Hydrocarbons‘ private stock. I hope to God this situation results in real change, new regulations on hedge funds and FINRA, and less market manipulation in the future. It stinks of corruption, and gives me little faith in the concept of the market being free flowing and administered ethically. At time of posting, this was the most recent update I received regarding the matter, and it leaves a sliver of hope for MMTLP shareholders. I hope things work out in their favor.

Missing Child: Losing Enzo

I’m going to tell you a story about a father, or at least a guy that thinks he is a father. From what I hear, he is pretty excited about the prospect of fatherhood, and considers it an awesome responsibility. How he came to be a father is far from conventional, but that didn’t paralyze him, and he was looking forward to everything he could comprehend about how his life would change from the moment he looked into the eyes of his own son. For him it was a dream, and his dream turned into a nightmare when his son went missing before he could ever lay eyes on him.

To tell this father’s story, there is only one name he would want you to know, and that’s the name of his boy, Enzo. For over 8 months he prepared with the child’s mother, though there was no romantic relationship between them. On nearly a weekly basis during the prenatal months, the expecting parents spent hours planning how the child would be taken care of. When angered, the mother threatened to run away with the child. Sometimes she humored the idea of co-parenting, but was strongly against broken homes. Because the father refused romantic relationship with the mother, the mother often wanted to abort the child or give the child up for adoption, and favored those options above allowing the father to raise the child absent of her involvement, even when assured no child support would be requested. You see, the mother had a bad experience growing up in a broken home and wanted no such life for her unborn child. At the same time, she wrestled with the thought of abortion. She knew the father wanted Enzo, even if it meant raising him alone. The mother knew how the father was preparing for the child, but was very upset when the father was out of town on the day she went into labor. She had not forgiven her own father for not being present for her mother when she was born. She decided to give the baby up for adoption, saying “He should have been there”. The father was denied access to any information about the child due to HIPPA though some US states have laws that allow anyone to inquire about the identity of a parent leaving an infant child at the hospital, emergency medical services station, or fire station. This situation would have to go to court, and that’s when things really take a turn for the worse.

The effect of COVID 19 caused delays in securing a court date. When a court date was finally set, Enzo would have been 5 months old. The first day in court, the mother’s lawyer submitted a motion to dismiss the case, stating that the child was left at the hospital, so the father should be required to gather any information from the hospital directly, as the mother’s parental rights had been forfeited. The judge denied this motion and ordered the parents to sort out their grievances in mediation. When the mediation date arrived, the mother was uncooperative, exercising her right to remain silent. When Enzo would have been about 6 months old the parents met in court again, and the judge thought it was reasonable to require the mother to disclose the hospital of which she gave birth. The mother gave this information begrudgingly. The father and his lawyer, spent the next few weeks contacting the hospital and worked their way up the chain of command until they got someone to acknowledge and obey the court order over HIPPA and disclose data they had in their system regarding mothers who left their infant at any of the hospital’s locations. There was no match on the mother’s name or child’s name at the hospital that was given in court, for all the reported hospital’s locations in the tri-county area. By the next time, the parents would appear in court, Enzo would have been just about 8 months old, and the father would have to begin apologizing to friends who gifted clothing for the baby’s first few months of life at the intimate baby shower he organized for Enzo weeks before birth. When the inconclusive report from the hospital record search was given to the judge, the mother would be sworn under oath for the first time, and asked to provide sworn testimony under penalties of perjury regarding where she gave birth. The mother, representing herself, stated under oath, that she did not know where she gave birth, and after 8 months, had forgotten. The judge then gave the father and his legal team the ability to search the mother’s phone because the mother reported to be in possession of a photograph of baby Enzo at the hospital, on the day the child was born, which could have been used for geolocation purposes. A private investigator and the father’s lawyer examined the mother’s phone and photo files of the child to no avail. The mother appeared in court with new representation 2 months later, and under oath stated she was never pregnant and the whole thing was made up. The father contests this, but his legal team has lost interest in his case, as it has taken longer than expected and has yielded little money for them. With proper, diligent representation, the father could get the information he needs to find if the baby was adopted, or if something more sinister has taken place of which the mother is trying to cover up. He maintains that he was in the presence of the mother the entire duration of her pregnancy, and even helped her to make a “paper mache” mold of her stomach at 7 months. He has several ultrasounds the mother gave him during the prenatal months that he is forced to cross-reference with local hospitals and clinics, when he gets off from work, due to stagnating support from his legal team.

Men like Enzo’s father, are in need of reform in the area of father’s rights, as well as financial assistance while awaiting on the law to mature around the issues of father’s rights. As Florida Governor DeSantis approves millions towards Father’s rights, there are fathers in desperate need of competent legal assistance. Not only should more Governors initiate similar initiatives in their states, but providing grants to help fathers secure better legal assistance would help since so few laws give the father any inherent rights to a child without DNA testing. When a father has been proven to have done due diligence with respect to establishing paternity, such a grant would allow swift legal paternity actions to be filed to overturn unjust adoptions, and also provide justice in cases when the mother may have acted criminally against her unborn child. Florida happens to be a state that has such laws that allow fathers to inquire about the identity of a parent leaving a child at a hospital, however no hospital would place this state law above HIPPA, even when pressured by a lawyer. The legal teams of hospitals have to be involved which wastes more precious time as the trail for children like Enzo grows colder by the day.

Equal Pay for All

Violations of the law of anti-hypocrisy must stop wherever it may rear its head. Whether you learned it as “love thy neighbor as thy self” or “Would you like that if your sister did that to you?” almost everyone has been taught the concept of anti-hypocrisy by a person that loved them at an early age. It is something that is assumed we all know, and it should be obvious we do not all live by it. This principle shapes our laws of ethical business practices, criminal law, and is the spirit of fairness. It is the spirit of sportsmanship, and the spirit of many sacred things that we as humans hold dear like the price for food and commodities. You want a “fair price” don’t you? You want the umpire to call a “fair game” and you want “fair pay” for the work you do…Oops…Maybe I shouldn’t go there. Since there are still companies that pay women less money when they do the same work as men. Just as well, employers are still paying black people less than white people for the same job…but wait…Where does that leave black women?

If John negotiates a great salary for his project management position, it should be considered unethical to pay anyone less, with similar experience, at the same office, for the same position, if hired after John. John set the bar, and everyone else benefits from the bar he set. Is this not fair? Is this not what equal pay for equal work is all about? Sometimes there is no way to know what John negotiated, unless you ask him. But should you have to ask? The company knows, and they should acknowledge what the position is worth to them and should pay all future employees that amount. On the back end, when reviews are given, any person excelling at John’s position should be given a raise to get them somewhere within range of the new standard pay for the position.

Violation of the law of anti-hypocrisy has to end. Let’s start paying people fairly. If anyone, white man, black man, red man, method man, or orange man perform the same job, for the same organization, with similar or offsetting credentials (education, experience, certification, etc.), lets pay them the same. Let us govern our pay scale as they do in the NBA, NFL, FIFA Soccer Leagues, etc. If a starting quarterback at the top of his game negotiates a record contract from his team, it helps all the rest of the starting quarterbacks at the top of their game in the NFL. The same goes for NBA players and soccer players. Why should it be any different for INSERT OCCUPATION HERE?

The Wasteful Male Consumer

Musical Vibe: Jay-Z – The Story of O.J.
Spirit: Remy Martin 1738

Guys and their hobbies…SMH
It makes us tick, it is the topic of our conversation. We have to be enthusiasts, aficionados regarding the things we say we care about. This often comes at a price. I don’t have to quote Fortune Magazine or dig up any specific statistic to tell you that men spend an awful lot of money on their hobbies each year. Take your pick, and you’ll see the same trend. Whether it’s video games and accessories, watches, pens, cigars, scotch, wine, automobiles, or the countless gadgets marketed to men, we are big spenders for the things we like.

Maybe we want to bond on shared interests with our crew, maybe we want to impress the ladies, maybe it’s a combination of the two. No matter our motivations for the things we buy, shouldn’t we always strive to be more efficient aficionados? Did the late Tony Stark not teach us that a major part of improvement is eliminating waste, before his untimely demise? That’s right! In the first Iron Man movie, the first metal suit started off as a junkyard-style scrap project for the survival of self. By the last Infinity War, the Iron Man suit was improved to an elegant, life sustaining, masterpiece of technology for the survival of the UNIVERSE! And it wasted less energy.

I digress. As men, we should be mindful of when we’re being taken advantage of as consumers, and avoid being wasteful. Today, I saw a device that retails for $18, advertised to men as a beard filler. This beard pencil could easily be replaced by a $2-5 eyebrow pencil from the drugstore and yield the same results. We’ll pay the 20 bucks because it’s “For Men”, and that isn’t being a wise consumer, it’s being wasteful. The same goes for many other products advertised to men for their beards. Pretty much any product that is good for the hair on top of your head, is good for your beard, but we spend crazy amounts on beard oils, balms, and other treatments, to achieve the same results, when these products often come at more expensive prices and with much less volume per unit than the products advertised for our head-hair.

Part of being an enthusiast, is being savvy. Ask any “car guy” you know, and he’ll tell you. Beyond the benefit of money saved on labor when doing maintenance to your car yourself, it’s harder to be taken advantage of in the case that you actually need to take your car into the shop for repairs if you “know your stuff”. Let’s stop being chumps for marketers, and start being savvy consumers. The prices and quality of the “For Him” product will reflect our wise decisions, and companies will have to work harder for our hard-earned dollar.

Cheers Mates!