And it Continues
When I posted last week about the decrease in local ownership of Utah business, I neglected to include a piece of information I had received a couple of days before: TenFold had agreed to a reverse IPO merger. Versata Enterprises, another business software company headquartered in Austin, will buy out the shareholders. TenFold went public in the dot-com boom but has been a penny stock for some time. It overhauled its management in 2005 and has been aggressively marketing since, but as many have suspected, it was merely to attract suitors. A sign of how far TenFold has fallen is that it also had to sign a $300,000 promissory note in favor of Versata and secured by all remaining assets. You can expect TenFold to be folded by Fall.
And this morning I learned that Nexia Holdings, which owns Landis Salons and Black Chandelier stores, is publicly begging for a buyer. Since Nexia is public, its principal carrot is that it can take a private suitor public via reverse merger without an IPO. Nexia has had two reverse splits in the last year, trying to keep its value above that of Zimbabwean currency, but apparently it's over.
I notice that Nexia's CEO is Richard Surber, a major local player in penny stock public shells, whose schemes seem to benefit him a lot more than the companies he "advises." There are a pile of such sharpies operating here in Utah, taking advantage of small business owners who are looking for capital. I can't see how these stores have any business being publicly traded. If anyone tells you that you ought to go public through a reverse merger with a public shell, at the very least get legal help. You probably ought to put a death grip on your wallet and run away.
My big concern is whether I should invest in anti-depressants. If Black Chandelier goes under, my daughters will be in a major funk.
Too Close to Home
I opened the paper earlier this week and learned that there was another mass killing involving Hills Bank in eastern Iowa (There was one about 20 years ago when a farmer shot his wife, a bank officer and then himself.). This time a bank officer killed wife and four kids before killing himself. He'd been indicted for embezzlement and was scheduled to go to trial in federal court next month.
I titled this entry "Too Close to Home" because my parents bank there, as did my grandparents. We know everybody there. And I have to say this is another, albeit extreme, example of the Great American Tragedy. He got wrapped up in maintaining a lifestyle at whatever price, and he lost sight of everything else.
I've seen this play out a lot of times in my career. People get on a track, and before they know it, they're a million miles away from whom they thought they were. Some have managed to switch back on their own. Some have gone through bankruptcy. A few ended up in prison. But a disturbing number ended the problem, or at least their concern for it, permanently and violently.
Let's face it folks: Lifestyle is an ephemeral thing. Even under the best of circumstances, cancer or a car crash can blow it all away. Consequently, when you start your career, it's a good idea to sit down and write down what you hope to achieve, and then review and revise periodically. If you're self-employed, it's even more important to do that, first because you're calling the course for both your life and your business, and second because you don't have an employer to set any agendas for you.
When I help clients set up businesses, I like to sit with them and help them make those lists of goals and priorities. First, if I don't, I can't give them the best legal advice. Second, I've seen too many examples of what happens to people who don't lay that kind of foundation. Usually I've seen it as a lawyer, but there were too many times I saw extreme examples when I was a coroner. Believe me, such results are worth a little planning to avoid.
And if you want to pretend you're an international player...
...it's not a good idea for the Legislature to accuse an esteemed international training program of being a Commie plot.
The International Baccalaureate program is a rigorous, uniform program designed to prepare our kids for the global economy and create at least some modicum of an international diploma standard. In effect, it allows our high school students to say, "See, I really do match up with kids from other countries."
Relatively few Utah schools offer the program, and the cost isn't that great compared to the whole state eduction budget. But when proponents sought funding from the Legislature, Sen. Margaret Dayton of Orem decided the program was "anti-American" and got Sen. Darin Peterson of Nephi and my own Sen. Howard Stephenson to vote with her to shoot down the funding. After a general uproar, the Legislature agreed to provide some token funding, but Stephenson is still pushing for an investigation of the program because he's "heard some concerns from teachers and parents."
There are those who believe that teaching anything other than American Hagiography is treason. Folks, such a course does our kids no favors. The IB program introduces kids to different points of view. Given the world they are marching off into, that's a good thing. Even if they never leave Utah, the odds are getting pretty good that their co-workers and even their bosses will be from someplace else and hold opinions vastly different than theirs. They might as well get used to that reality now. And so should the Legislature.
What's the Gov Smoking?
At his Economic Summit at the Grand America last week, Governor Huntsman said, "Our state's economy is resilient and strong."
Earth to Jon: Utah doesn't have an economy. The descendants of the sturdy pioneers of '47 like to believe this is still an enclave in the wilderness, but as my grandfather used to say, "That's a bunch of hooey." Utah isn't California; it doesn't create its own economic climate. Utah is a derivative of everywhere else.
Take a look around. ZCMI is long gone. Novell's HQ is elsewhere. SCO will be dragged out of bankruptcy by New Yorkers and Arabs (BTW, take a good look at Utah County. The only local businesses of any size there are network marketing companies.). Howell's Photo is gone (a tragedy, in my not-so-humble opinion). After 18 years, Dreyer's has dropped the hammer and discontinued Snelgrove's (Oh, the humanity!). The Downtown and Trolley Square overhauls will be populated by national chains, not Utah businesses. Utah is a leaf blown by national and international winds.
On the other hand, there will always be people who want to walk into a business and talk to the owner. With such businesses getting scarcer, it may be time to open up your own.