Citron Research Focuses on Tubearoo (TUBR.pk)

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Ties to Manila Boiler Room Ominous for Investors

As long as Wall Street regulators are going to tolerate high budget promotional campaigns run by anonymous parties on non-reporting pink sheet stocks with dilutive share counts, scant hard assets and non-existent revenues, the public is going to take the brunt of the multi-million dollar losses these ugly “investments” inevitably inflict on them.

The latest example is Tubearoo (TUBR.pk), which recently launched a penny stock to over $4.00 per share on the pink sheets – on the legs of a $1.5m promotional campaign based around a 4-color glossy mailer and a recently registered website:   http://www.visioninvestorreport.com/ Here you will see a glossy brochure, written anonymously, indicating this tiny company is the “next YouTube”. 

The big difference of course is that YouTube is a market leader in user-contributed video, generating gargantuan traffic in the winner-take-all game for internet “critical mass”.  The problem with the comparison is that Tubearoo has 1/10,000 the of the traffic of YouTube – something akin to starting an Ebay competitor in your basement.  For a few thousand dollars, you might put up the software to run classified auctions on your website, but that is no recipe for financial success.  Without traffic, it’s a worthless exercise.

This company has a fully diluted share count of 151.9 million outstanding.  Over half of these shares were conferred to the owner in payment of a $200,000 loan.  This gives an eye-popping market capitalization of over $360 million dollars for a company arguably worth less than $1 million. 

Citron notes that the budget of this promotional campaign is over 7 times the cash and over 3 times the total stated assets of the company!Their revenue for three months ended March 31, 2007 was $960.  Yes, that’s less than the welfare payment for a single mom with a kid.  The internet is littered with thousands of wannabee competitors for market leaders Google, Ebay, Yahoo, MySpace, etc., etc.  Nobody knows ab


 
YouTube TubeAroo Differential
Reach – 1 wk avg 10.21% .0035% Youtube has 2000 times more reach
Rank – 1 wk avg 4 36,225

http://www.alexa.com/data/details/traffic_details?url=www.tubearoo.com

If we roughly value Tubearoo to YouTube based on its recent 1.9 billion buyout price, we’d get $1,000,000 for Tubearoo – or about .006c per share, fully diluted.  Meanwhile, the promoters sell off millions of shares for millions of dollars, and slink away into the shadows. 

Enter the Boiler Room

Making this worse, Citron has discovered a direct link between Tubearoo and a known unlicensed overseas caller listed in a warning bulletin published by the Australian Securities & Investments commission. http://www.asic.gov.au/fido/fido.nsf/byheadline/list+of+unlicensed+overseas+cold+callers?openDocument

 On the above linked page, look up the address for “Norwich Asset Management (UK) Ltd.”.You’ll see its listed at:

1903-B West Tower

Philippine Stock Exchange Center (PSEC)Exchange Road, Ortigas CenterPasig City, Metro ManilaPhilippinesNow have a look at the corporate filling for Innovision International, the predecessor shell corp for TUBR, filed in Florida. 

 fl-doc.pdf 

 LOOKS LIKE THE SAME ADDRESS TO US ….. RIGHT DOWN TO THE SUITE NUMBER.
 
Conclusion This doesn’t look like a real high quality investment folks.  If you hold this stock there is a high likelihood you will lose all your investment when the music stops.Cautious investing to all.