- Peculiar Legal Opportunity With Activist Catalyst

Jul. 27, 2017 2:21 PM Inc. (FNDM)34 Comments
Jan Svenda profile picture
Jan Svenda


  • This company which owned the URL and several unrelated assets used to be operated by a notorious fraudster, Mr. Jason Galanis.
  • During his time, FNDM was misused and treated as a shell for the benefit of Mr. Galanis. After his conviction, Thomas Braziel became FNDM’s receiver and restarted several legal processes.
  • These lawsuits could yield an interesting upside as there are a number of opportunities for the shareholders to start benefiting from previously owned and misused assets.
  • Most importantly, the company is yet to receive roughly $2.2 million from AdvisorShares, an ETF manager which FNDM used to have a stake in and which it sold several years ago.
  • This amount is not disputed and creates the initial upside as the current market capitalization of FNDM is around $1.7 million. At the very least, it presents a margin of safety.

Investment Thesis

I believe that investors should benefit from initiating a statistical position in, Inc. (OTC:FNDM) (or at least have the stock on a watchlist) due to the following points:

  • The previous management has misused company’s assets and mainly operated FNDM for its own benefit. It bought a stake in an ETF manager, a URL ( for $10 million and several smaller assets for the purpose of creating a company focused on investment management, but that business plan never realized and instead, FNDM became part of a fraudulent activity purported by the previous management headed by Mr. Jason Galanis.

  • Mr. Galanis was sued (and ultimately jailed) for the connected fraudulent activity, and thus FNDM was left unoperated and without a proper care for the interests of minority shareholders. That was until late 2016 when Thomas Braziel, a fund manager focused on unique investment opportunities (bankruptcies, receiverships etc.) got himself assigned as a receiver (‘substitute management’) and started to investigate potential claims that FNDM could assert due to its checkered past.

  • Thomas discovered several opportunities that could create an upside in the stock. Most importantly, it is the settlement with AdvisorShares which arose after FNDM launched a lawsuit alleging that AdvisorShares wanted to nullify FNDM’s investment in the ETF manager. The settlement stipulates that FNDM should receive additional $2.2 million to the $2 million already received in the last two years (but distributed to the previous management). This amount is not disputed by AdvisorShares and is highly likely to be received sooner or later. This could already create an upside in stock as the current market capitalization is only $1.69 million.

  • Other opportunities include the URL ( that FNDM originally bought for $10 million. The asset changed ownership several years ago, and FNDM currently does not ‘own’ the URL, but Thomas launched a lawsuit regarding the change of

This article was written by

Jan Svenda profile picture
I am an investor and analyst focused on two fields. Deep value in the Over-The-Counter (OTC) space and short-selling on the listed markets. The first focus has involved me running my own newsletter for the past two years. Compiled database of research and stocks can be found on my website - I am now working on various special situations within the OTC space. The short-selling focus is for now confined to my own research and weekly analysis of Short ideas for Seeking Alpha PRO+ community. From time to time I also contribute to Safety in Value's marketplace 'Microcap Review'.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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