BIDZ Shareholders Fight Against Alleged Illegal Shorting

The internet has changed how shareholders communicate. Now many shareholders flock to different websites to blog with others about their favorite stocks. This past Friday, BIDZ.com (BIDZ) former Chief Operation Officer Matthew Mills decided to fight back against what he believes is an illegal shorting activity. Here is a copy of the Yahoo blog in which he addresses his intentions.

Ladies and Gentlemen,

As most you know, I am the former Chief Operation Officer of Bidz. I have maintained a very close relationship with a great number of the original shareholders of Bidz and still hold a sizeable stock position in the company. Over the last couple of days I have been meeting with a number of large investors of Bidz. These investors are very well known in the investment community, connected to big name law firms coast to coast and have political ties in Washington DC.

All of us long shareholders believe that what we have experienced recently is a well organized illegal short attack on Bidz. After numerous discussions, we have decided that it is time to take these matters into our own hands. We now intend to combat these seemingly illegal activities through our legal system. The attorney's that will represent myself and other shareholders are confident they can file actions against the persons and/or entities involved. In addition, we will be working on getting the right people in the right places to listen to us. If the shareholders work together in providing the necessary proof it will strengthen our cause.

The first step will be to file lawsuits against certain individuals and/or entities who have been involved in the publishing and disseminating negative information as part of the scheme to illegally manipulate Bidz stock.

Another course of action will be to go after the firms involved with improperly trading the stock. Part of this phase will be to gather information regarding shareholder holdings so as to determine amounts of the company's actual float and available shares. We are very confident that if we get all of the sizable shareholders together and prove our holdings against the current float, we will be able to assist in revealing counterfeit shares for which a number of brokerage houses are responsible.

I have volunteered to round up the troops and start gathering information to try to put a stop to this unlawful action once and for all. Justice and a level playing field will be ours.

If you are a Bidz shareholder and would like to help this cause it's important that we get together one on one and discuss our plan of attack.

My contact information is as follows; matthewmills21[at] yahoo.com

I will start my follow up next week, all information that is gathered will remain confidential.

Thank you for your help!

Matthew Mills

Bidz Shareholder

It appears Matthew Mills believes that some of the articles published about BIDZ are untrue and were written and published to help the short attackers. I would like to discuss some of the issues reported in regards to "shill bidding" Shill bidding is the practice of fake bidding to drive the price of an item up during the auction.

I am a verified customer on BIDZ and I have purchased over $13,500.00 in winning auctions. I have won many auctions. I currently use the watch list and continue to monitor pricing to see if this shill bidding might exist. In my findings, I have purchased too many items for what I believe were exceptional deals to believe that shill bidding has ever taken placed. I challenge anyone to watch the website; there are many items that sell for the initial bid of $1.00. I certainly would not buy from a website based business if I ever thought something seemed fishy with the bidding system.

I would like to discuss the return policy which has also come under fire. I have only returned one item and I have purchased well over 100 plus items. The item I returned was refunded 100% and the process was very easy. Many people claim that BIDZ sells junk jewelry, I can attest that this is not true. "CLEAN Diamonds(SI and better)" items are anything but junk and BIDZ has a very good selection of top of the line jewelry. I have purchased "IF" internal flawless diamond pieces off their website. They offer their customers a wide range of jewelry from very low cost, to high end IF diamond pieces. Bidz offers their customers significant savings over retail pricing through a fun auction where each buyer decides how much they are willing to pay for the item.

What does this mean to BIDZ shareholders? There is one thing very clear. The support has been very high. Further blogging on Yahoo message boards for BIDZ show that the shareholders of BIDZ are behind this effort and Matthew has started numerous blogs with updates. The latest blog by Matthew Mills is subject titled "Becoming Class Action for Bidz Shareholders."

It would appear that the shareholders are fed up with the current stock price and ready to fight back. The company they stand behind recently presented in Las Vegas, NV at the Citi Investment Research Annual Small & Mid-Cap Conference.

They reported Q4 2002 pre-tax income increased 766% YoY to $8.2 million. 2007 pre-tax income increased 275% YoY to $20.7million.

Let's not forget that BIDZ's 4th quarter numbers exceeded guidance and stomped estimates when they reported EPS increases of 625% to $0.29 from $0.04 prior year. 2007 pre-tax income increases 200% to $0.69 from $0.23 in prior year. BIDZ also announced they were increasing 2008 guidance. That's a very upbeat announcement, considering that competitor Blue Nile (NILE) has stated the complete opposite and is not as upbeat about the near future as BIDZ. Blue Nile announced 2008 net sales are expected to be relatively flat with Q1 2007.

Those impressive numbers have not helped the stock. In fact, the stock has gone down since the 4th quarter and year-end numbers were reported. BIDZ has released that institutional investing has been increasing and BIDZ has increased their buyback program from $5 million to $20 million. Nothing seems to help the stock. The stock is currently trading a P/E ratio of 11.5. This price seems very low compared to competitor Blue Nile, whose P/E is 45.17. Keep in mind that Blue Nile announced that 2008 net sales are expected to be relatively flat with Q1 2007.

It would appear that BIDZ shareholders have something worth fighting for and are determined not to sit around while their company continues to exceed guidance and report record numbers amid a slowdown in the economy. I guess it is appropriate the internet based BIDZ is getting support from its shareholders through the internet web blogs. One thing is for sure, BIDZ shareholders are ready to battle for a company they believe in.

Disclosure: I am a Bidz verified customer and shareholder and have a long postion in this stock.

Comments

[Purl Gurl:]

I will be succinct. My personal opinion is BIDZ is a scam company.


Okpulot Taha
Choctaw Nation

2008 Mar 24 12:01 PM

[Antar hater:]

I will be more succinct, you are a short and desperate to cover.

I've bought from BIDZ and have been happy with what I have won in the auctions-please elaborate how that is a scam.

2008 Mar 24 12:07 PM

[jimmy46:]

I haven't seen an example yet where someone has attacked short sellers and it didn't turn out that the company was engaged in fraud.

2008 Mar 24 01:20 PM

[User 110019:]

I guess Overstock.com is another one of those company you think is engaging in fraud. They went after the short sellers too.

2008 Mar 24 01:36 PM

[Purl Gurl:]

Matthew Mills, quoted above by Scott Evans, writes an article which parrots, almost word-for-word, hundreds of articles I have read over the many years. In each case, those type of words precede a company collapse after fraudulent activities are exposed.

"I'll get those shorters! I'll sue them, sue others, sue everybody!"

Just a pile of mule manure excuse making. None have been successfully sued for lawful shorting nor has Timothy Miles nor has his alter ego, Andrew Left, ever been successfully sued for their exposé articles, although inanely emotionally charged laughable articles written to masturbate their egos.

Nothing new about any of this, just a handful of shareholders all ticked off because they suckered into a scam company and are looking to blame any and all for their poor trading decisions.


Okpulot Taha
Choctaw Nation

2008 Mar 24 01:47 PM

[Cagauss:]

Interesting. Purl Gurl engages in name calling but offers no comment whatsoever about the company or what the scam might be!!

Anyone can stop by BIDZ offices and see a vibrant, busy operation. UPS and FEDEX trucks pulling out all day long.

2008 Mar 24 02:19 PM

[Mark J Abrams:]

I have been a Bidz shareholder since 1999, long before it went public. I strongly believe in the company and management. I have seen a great company trashed over innuendo, half truths and illogical conclusions from the facts.

I have purchased over 600 items from the Bidz website and have never had a problem with any of the merchandise, the delivery, billing or any other issue. I have taken a significant portion of the jewelry to a trusted source (a certified gemologist) to have it appraised and in every case, the jewelry appraised for a significantly higher price (typically 3-8 times) than I paid for the merchandise. As some of the naysayers point out, the "compare" price does seem high. My experience is that in most cases, the price that one would pay for the merchandise would be lower than the compare price, but that does not mean that you could not find someone selling the merchandise for that price. If fact, I have found similar merchandise for the compare price when shopping in some of the "expensive" stores. It is difficult to feel cheated when I got such a great price, in spite of the fact that I could have purchased the merchandise for less than the compare price.

The F rating from the Better Business Bureau in my opinion is not justified. My personal experience with the company completely negates the F rating in my mind. The fact that they have only a handful of legitimate transactions with issues with over 10,000 transactions per day makes the problems such a miniscule percentage that it boggles the mind that the rating continues with the BBB.

I could go on for a long time about Bidz, but it has all been said before. The shorts are continuing to pass around their lies, but their day of atonement is coming soon. The Bidz shareholders are uniting to fight this wrong and we have enough right, determination and money to win the battle.

DISCLOSURE: I am very long on the stock. I have published a few comments on other blogs under Mark A. I have also been involved in various civil actions where I have been to the US Court of Appeals, the California Supreme Court and the US Supreme Court. I have spent over $1M in legal fees when some bureaucrats stepped out of line and I am in favor of going after the Bidz naked shorts along with all their brokers with the same vigor. I have joined in with the investors who organizing the legal attack against the naked shorts.

2008 Mar 24 04:42 PM

[Earning REady:]

Nice to see shareholders working together to combat the rampant naked shorting. It is my hopes more shareholders will united as the SEC seem to have an epidemic on their hands. I do not own stock in BIDZ but I own others where the individual shareholder is absorbing to much of these risks.
Best Wishes with your process. In the meantime the rest of us will continue to add our names to Market Reform Movement and the underlying issues of market manipulation and naked short selling petition link
thesanitycheck.com/

2008 Mar 25 02:05 AM

[Right from ...:]

Finally sell shorts sell. My outlook is weather it is a stock company or anything else in life why not let it grow or fail on its own. In this case let the numbers and business practices determine the fate of the company. Be fare because in the long run right will always over power wrong. To me this is black and white, buy now because the only way this has to go is up if you really think about it this is inevitable. For the shorts here is a sympathy suggestion for you. Sell now and buy some real shares in this company and you will indeed make up for your losses and then some. If you don’t you will be caught with your (shorts) around your ankles!

SELL SHORTS SELL!!!

2008 Mar 26 12:45 PM

[Chaz:]

I personally have purchased several items from Bidz and I can contest that the qualilty of the goods and to the deals they offer not to mention that the items are EXACTLY as they have specified. Out of the 8 items that my wife and I have purchased they all have been shipped in a timely manner and the items were obtained for what I would consider to be less than current market value. I do not feel that the company is scamming anyone as they certainly treated me as any company should. I do think that BIDZ is a place where if you know what to look for and how to bid by choosing the right time you can get an exceptional deal on quality jewelry.

My take: After seeing their Auction system in action I did by shares in BIDZ. Their auctions system is much better that EBAY's. SO YES I AM A SHAREHOLDER! This may be one of the only competitors that can stand up to EBAY over time and with the purchase of BUYZ.com which has yet to be released the company is making strategic decisions that show that they are in it for the long haul.

My suggestion would be if you don't like the company or the goods don't buy shares or any of their products. And... If you are short on Bidz then I hope you get your arse handed to you...

2008 Mar 27 11:24 AM

[Scott Evans:]

Bidz is a quality company... There is no fraud no scam.... The only scam are the shorts spreading lies and trying to scare people away. The company is strong and the stock is VERY UNDERVALUED... Buy shares while you can. Ignore the shorts.... The longs will be rewarded.

2008 Mar 27 02:55 PM

[David P.:]

Onward and upward, through the fog.

I have been on board with Bidz since the beginning and have watched David and the core build this company through the toughest of climates into a powerhouse. I hope those responsible for all this crap get what they deserve, a kick in the crotch.

David P.

2008 Apr 02 10:28 AM

[Scott Evans:]

David P... I'm there with ya.... They deserve a kick.... it's going to hurt their wallets...

2008 Apr 02 01:14 PM