On February 28, Eugene Melnyk wrote the board of directors of the company he founded, Biovail, indicating that he's unhappy with their current direction.
Eight months of idleness subsequent to his own departure appears to have been wearying. Melnyk, who owns 18.2 million shares (about 11% of the outstanding) wrote: "I am at this juncture formally informing the Board that I have decided to explore, and am exploring, various options available to me in connection with my interest in Biovail, including the possibility of joining with a partner or partners to acquire the remaining shares of Biovail, selling all or a portion of my current Biovail shares to a third party, continuing to hold my shares for investment, or seeking changes to the composition of the Board of Directors."
Seems to me the board might want to break into song:
"Once you went away, I was petrified/ Kept thinking I would never live without you by my side ... I will survive/ I will survive."
What can one expect from the show whose position on their infamous Bush National Guard story to this day remains, "we don't know it's not true"?
One wonders, in light of the fact that virtually all of the vocal "get shorty" companies have turned out to be overhyped frauds, why the SEC is devoting their supposedly scarce resources to the latest round of SHO idiocy.
Perhaps Chairman Cox will read a sample of the public comments on the new proposal and realize that the get shorty movement conists of a cult of nutburgers and wing-nuts, not a genuinely concerned group of concerned investors.
But then, since the impetus for this rule-making was almost certainly political pressure from a profoundly uninformed Western Senator, perhaps he won't.
Meanwhile, almost two years after the revocation of the get-shorty cult stock CMKX-a penny fraud which stole, conservatively $200 million from naifs-the SEC has taken no formal action against the perpetrators of this fraud. It should be noted that a large number of the SHO public commentary has been from these deluded shareholders.
It's going to be hard for Melnyk to get over this.
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Led by Melnyk, Biovail intentionally misstated both the effect of the accident on Biovail's third quarter earnings as well as the value of the product involved in the truck accident. The accident, in fact, had no effect on third quarter earnings.
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I wonder if Melnyk's unhappiness with the BOD that notNasser pointed out relates to their leaving him to face OSC and SEC on his own.
Star you make an obvious point that they should be focusing more attention on what are essentially self-identified scams. But it will take some work to put the information in a form they can digest. Think about what Erik Lie did, taking the observation that a lot of stock option grants seemed almost too good to be true, quantifying too good to be true, and turning the WSJ into his RA. We need to do something like that for the message to sink in at the SEC.
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