Seeking Alpha

David Pinsen's  Instablog

David Pinsen
Send Message
I founded Launching Innovation, LLC, to bring together developers, designers, and academic finance experts to create easy-to-use tools to solve complex problems for investors.
My company:
Portfolio Armor
My blog:
Steam Catapult
  • Red Flags Continue to Accumulate for DJSP Enterprises, Inc 3 comments
    Oct 13, 2010 4:00 AM | about stocks: DJSP
    Since there are more equity investors on the long side than on the short side, posts on some message boards can have a bullish tilt -- even if there are a lot of red flags about the stock in question. Sometimes the bullish bias is reinforced by moderators who delete bearish or skeptical posts and ban those who write them.

    The message boards on Short Screen -- one of the investing apps in Seeking Alpha's new Investing App Store -- were designed to offer a forum where there is no bias against skeptical or bearish comments. The Short Screen message boards include a premium ranking system to highlight the comments rated highest by the community.

    One of the Short Screen commenters whose comments are consistently highly rated goes by the handle "Avoidthegarbage". Avoidthegarbage made a prescient short call earlier this year on JBI, Inc. (then JBII.OB; now JBII.PK), when that stock was trading at over $5 per share (its closing price Tuesday was 81 cents).

    A couple of months ago, Avoidthegarbage turned his spotlight on DJSP Enterprises, Inc. (OTCPK:DJSP), and didn't like what he saw. Early this week, he raised more concerns about the company. Below are his most recent comments on it:
    10/11/2010 10:50 PM by avoidthegarbage
    Seems there is increasing scrutiny of the foreclosure markets and with DJSP centered the way they are with the foreclosure markets it still seems like a decent short idea. Yes it has a tremendously low PE but the more I try to look where the cash from earnings has gone previously the more I kinda have that little voice in the back of the head going 'hmmmm'.

    http://finance.yahoo.c...=

    I believe the company had the recent class action stuff on them plus now the whole industry looks like it is getting scrutinized with the above article.
    Throw in that when I looked to see what happened to the company's huge earnings numbers as far as where cash went on the balance sheet and it looked to me like the CEO had been pocketing it for the most part (as compensation I guess).
    Makes me keep going 'hmmmm'. I am not short this but am watching to see how this turns out and have had my eyebrow raised on them since the double digits. Don't think I posted about them here though until they were well below those highs.

    10/12/2010 09:19 PM by avoidthegarbage The company does not have a lot of cash on its balance sheet. With the class action suits and the further scrutiny intensity on this segment of industry, what happens if they settle for large $ amounts or have other legal claims against them? Remember, IMO most of that big $ they made last couple years already got paid out as 'Distributions and dividends' per their annual filing (page thru to cash flows).

    10/12/2010 09:46 PM by avoidthegarbage

    Also saw this general article from Yahoo: http://finance.yahoo.c...=

    10/12/2010 09:53 PM by avoidthegarbage

    This doesn't look good for Stern and DJSP IMO:

    http://www.businesswee...



    Disclosure: No positions

    Disclosure: No Positions
Back To David Pinsen's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (3)
Track new comments
  • Humble Value Miner
    , contributor
    Comments (426) | Send Message
     
    just for a contrarian approach: at present I see no signs of wrongdoing by DJSP; rather, these articles talks about BAC or GS hiring walmart employees (or other supposed non trained people) to do foreclosures. They probably wanted to avoid to route the foreclosures through professional foreclosure personnel such the people as DJSP. Now that they have been catch, they should be forced to go the professional way, so this could mean more job for DJSP (as they already shown that this kind of stuff can't be invented in a short time). Of course banks are not in a hurry to foreclose but they will have to do something at least to show they are "working"...
    13 Oct 2010, 02:27 PM Reply Like
  • David Pinsen
    , contributor
    Comments (1050) | Send Message
     
    Author’s reply » You should post your comment on Short Screen -- I'd be interested to read Avoidthegarbage's take on it.
    13 Oct 2010, 07:20 PM Reply Like
  • olenick
    , contributor
    Comments (10) | Send Message
     
    DJSP is garbage. I've been saying so on the Yahoo boards under michaelo1966 since the time they were trading at $12 or whatever the high was. At the time I projected $3 in Sept and, sure enough, that's where they landed. They're not only cooked, but they're likely to bring a few of their clients with them to the undertaker.

     

    No bank, no judge, no lawyer, no title company, nobody is ever going to trust Stern. Even if he's magically acquitted of everything, gets back on the Fannie/Freddie approved list without which he has no files (he was frozen out this morning), gets past all the regulators, wins every securities suit, and manages to deal with the $80 million in debt the company is carrying, he's not going to be able to garner clients or function even if he did.

     

    Michael Olenick
    olenick@legalprise.com
    13 Oct 2010, 09:42 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.