Excerpt from Barron's Weekly Magazine. Receive all our excerpts by signing up here:
Paying the Piper at SulphCo by Bill Alpert
Summary: SulphCo Inc. (NYSEMKT:SUF) stock currently trades at $3.91, having fallen as low as $2.25 from its peak at $19.70. The company claimed it could turn sulfurous crude into clean-burning oil. Savvy investors should have known better. With some research, anyone could have known that founder Rudolph W. Gunnerman was prone to flaunt phony Ph.D.s from overseas 'diploma mills' despite never finishing college, and that his previous ventures cost investors millions. Some former associates say he claimed to have invented the laser, and spoke of being Hitler's son. On Jan. 12 SUF's board fired him as CEO, at a meeting during which he tried to have them arrested for trespassing; the Board accuses him of trading on insider information and lying on a recent podcast in which he claimed the company would turn profitable this month. This is but one example of due diligence, and the risks of betting on unsubstantiated science.
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