Confusion Causes 12,000% Run Up In Riviera Tools Company

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Auspex Research


  • Tesla announces acquisition of Riviera Tools in Michigan.
  • Riviera Tools is actually Riviera Tools Acquisition, LLC.
  • Stock traders buy defunct Riviera Tool Company.

News of Tesla's acquisition of a Michigan-based auto supplier caused a great deal of confusion today. When Tesla (TSLA) announced that they had purchased Riviera Tools for an undisclosed amount, shares of Pink Sheet delinquent filer Riviera Tools Company (OTC:RIVT) were worth about 1/2 of 1 penny per share. By lunchtime, these shares were worth 60 cents each as penny stock traders spread the news that Tesla had acquired the company. Who could blame them? The companies seemingly shared an address. However, a little due diligence would reveal that while the 2 entities might have appeared on the surface to be one and the same, the fact of the matter is that one will become a part of Tesla and the other will, well ... we shall see how it turns out.

The confusion begins when you realize that RIVT is Riviera Tools Company, which at one time was what is now Riviera Tools, LLC. Here is how one became the other:

Riviera Tools Company used to trade on the AMEX in the mid-2000s. During this time, they entered into a financing agreement with Laurus Master Fund, Ltd.

In 2007, Laurus would foreclose on the assets and intellectual property of RIVT.

Pursuant to the foreclosure proceedings, in accordance with the
Uniform Commercial Code, the company was released from certain
indebtedness to Laurus in exchange for the surrender of the
company's assets and intellectual property securing its
obligations under the credit agreement.

As a result of the Foreclosure Agreement, the company has no remaining operations and a de minimus amount of cash.

The company said that after the foreclosure, Laurus sold the
assets and intellectual property in an arms-length transaction to a privately held North American company, Riviera Tool LLC doing business in Michigan as Riviera Tool Acquisition LLC.

The new owner

This article was written by

Auspex Research profile picture
Long-time nano and micro cap analyst.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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