My Thoughts on the $750 Million Dollar WorldCom Payout

CNN Money ran a story on the $750 million dollar fund the SEC created to compensate WorldCom investors. What does this fund mean for the future of investing? Is everyone who made a bad investment decision entitled to a payout?

People generally go into the stock market knowing full well their investments may lose value, and if they don’t understand the risks involved they probably deserve to go bankrupt. When I read this story I felt like I was back in elementary school playing kick ball and my teacher insisted that “everyone was a winner because they tried.”

When you take risks to make money you win some and you lose some. It’s the nature of the game. When you start rewarding people for bad choices or bad luck you start down a slippery slope.

I guess the real question I should be asking myself is why would the SEC authorize a $750 million dollar payout? Well, there does seem to be a valid reason, SEC Chairman Chris Cox explained to CNN Money that reimbursing WorldCom shareholders would increase the confidence investors have in U.S. markets.

Is compensation really going to have an impact on investor confidence? No. It has been about 4 years since WorldCom collapsed and I haven’t read any articles lately on investors moving funds from large cap stocks into savings accounts and bonds because they’re afraid of accounting scandals.

Today's Bears: United Panam Financial, Cosi Inc

Fat Lazy Bear: United Panam Financial Corp.
Symbol: UPFC
1 day Loss: 22.44%
Reason: United Panam, provider of specialty finance products including auto loans took a dive today when they announced their earnings had fallen to $4.5 million from $6.97 million.

Lazy Bear: Cosi Inc.
Symbol: COSI
1 day Loss: 22.1%
Reason: Coming in at a very close number two is Cosi Inc. Shares fell when the company announced it anticipated a loss. (Everyone else expected it to break even.) Your sensei thinks sales sucked because they were banking on selling “shareables”.

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Today's Stock Sizzlers: MSGI, Accentia, Zanett

Bucking Bull: MSGI Security Solutions, Inc.Symbol: MSGI
Symbol: MSGI
1 day Gain: 57.77%
Related Links: MSGI Announces New Deal
Reason: MSGI has secured a deal with Hyundai Syscomm to set up security and surveillance systems across Asia. Terms of the deal include an exclusive license for developing security systems in exchange for 900,000 common shares of MSGI Security Solutions Common Stock.

Bull: ACCENTIA BIOPHARMACE
Symbol: ABPI
1 day Gain: 41.67%
Related Links: Full Story on BiovaxID Breakthrough
Reason: BiovaxID, a drug currently being researched by Accentia has demonstrated a high potential for increasing chances of disease free survival in patients whose cancer relapsed after chemotherapy. This drug has been described as “remarkable” by Dan Longo of the National Institutes of Health.

Bull: Zanett Inc.
Symbol: ZANE
1 day Gain: 32.8%
Related Links: Zannett Expects Growth
Reason: Zanett Inc, provider of information technology has adjusted it’s revenue prediction for the 3rd quarter of 2006 to $11 million, up from $10.5 million. Zanett also predicted a whopping 27% revenue growth this year.

Stock Losers: APOL and WEDX

Today's Losers

Company: Apollo Group Inc.
Symbol: APOL
Loss: 22%
Profile: Apollo Group Inc. provides education for adults under it’s subsidiaries including The University of Phoenix.
Reason: The Apollo Group failed to live up to Wall Street’s earning expectations and it’s stock took a nose dive.


Company: The Westaim Corporation
Symbol: WEDX
Loss: 21%
Profile: Focuses of technological development in the field of flat screen televisions.
Reason: Clinical trial of it’s subsidiary Nucryst failed and investors dumped the stock.

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Today's Top Stocks: Siga, Ivanhoe, and Biodisen

One of my favorite things to do during the middle and end of every trading day is check out the big winners and losers. It’s a good way to spot trends and bargains. I’ll try to do a daily recap of the top and bottom 3 stocks each trading session.

Big Winner: Siga Tech Inc.
1 day Gain: 130%
Symbol: SIGA
Related Links: Siga Tech Press Release


Reason: Siga Tech is pharmaceuticals / biotechnology that researches and develops vaccines and cures for pathogens and diseases used in biological warfare. Appearantly the scientists at Siga Tech weren’t monkeying around. Siga Tech announced today that their SIGA-246 drug designed to fight small pox was 100% successful in primate testing. My hat’s off to you Siga Tech for dominating today’s trading session with a 130% gain!

Other Winners

Company: Ivanhoe Mines Ltd.
Gain: 33%
SYMBOL: IVN
Related Links: Ivanhoe / Rio Tinto News Story, Oyu Tolgoi Mine Home Page

Reason: Ivanhoe shares jumped 33% today because British mining juggernaut Rio Tinto (RTP) announced its intentions to invest 1.7 billion dollars into Ivanhoe’s Mongolian mining operations. Ivanhoe and Rio Tinto will work together to on the Oyu Tolgoi project. "We have long believed that the right partnership would bring important benefits to the Oyu Tolgoi project, the people of the South Gobi region and all of Mongolia,"

Company: Biodisen Tech
Gain: 20%
Symbol: BBC
Related Links: Biodisen Revenue Story

Reason: Biodisen is a Vermont based fertilizer manufacturer. Main offices and operations are in Shaanxi, China and boast to be China’s first environmentally friendly fertilizer producer. This stock rose because “[they] continue to make progress on all of our strategic initiatives…” In other words Biodisen’s stock rose because the company said it should. Earnings will be coming out November 15th and I’ll be sure to write about it when they do.

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