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What Is Speck? The Story Of The Birth Of A New Financial Instrument

Updated on July 27, 2017
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Stephen Sinclair is a freelance Canadian writer who has been publishing professionally for several years.

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Speck could save both lives and life savings

Though it has yet to be formally legislated into existence, speck does certainly currently exist. Speck represents equity ownership in public corporations with no revenues and is currently referred to as stock, though, as well shall see, it is really quite different.

Over recent years, I have been forced to contemplate the suspicious suicide of Nadine Antoniazzi, and the knowledge that her husband was involved with continuously selling stock in revenue-less companies that continually lost most of its value, as I have previously discussed with HubPages.

For some reason, stocks that seem comparable to those used to bilk elderly people of their savings by convicted U.S. swindler Jordan Belfort are sold by companies that Canadian politicians like Kirkland Lake Town Councillor Todd Morgan have been involved in, as reported by the Inquisitr. Morgan just happens to work side by side with Nadine Attoniazzi's brother-in-law, Kirkland Lake Mayor Tony Antoniazzi. My gut feeling about several publicly traded companies covered in Kirkland Lake media and owned by Kirkland Lake politicians and their family members is that they are merely fronts to raise as much cash from as many gullible people, as quickly as possible: to be never spoken of again.

This realization led to the understanding that if people like Nadine Atoniazzi's husband, Paul Antoniazzi, the CEO of RT Minerals Corporation (TSXV: RTM), director with Opawica Explorations Inc. (TSXV: OPW), and former CEO of Affinity Gold Corporation (OTC: AFYG), each of which has never booked any revenue and has shares that have lost the majority of their value, were forced to sell options instead of stocks that their seeming ability to deceive others would be greatly reduced. Investors in the option market are aware of the presence of time-value decay, where, if their bet on the market is wrong, they will lose all of their investment. The manner is which markets value the stock of revenue-less companies closely approximates that of option time-value decay is well understood by many market participants, as previously reported with the Inquisitr.

"A penny stock basically IS a call option with a strike price of zero that doesn’t expire."

Time-value decay: out-of- and at-the-money options

Note how both the option and the Opawica stock end up near zero.
Note how both the option and the Opawica stock end up near zero. | Source

Time-value decay: stock of revenue-less Opawica Explorations

Note how both the option and the Opawica stock end up near zero, but the Dow Jones Industrial Average gains close to 100 percent.
Note how both the option and the Opawica stock end up near zero, but the Dow Jones Industrial Average gains close to 100 percent. | Source

Deceit creates motive

Currently, it appears that investors in the stock of revenue-less companies are taking on risk comparable with that of option investors, but without the same level of disclosure. This would seem to create a situation where people like Paul Antoniazzi, and others involved in the distribution of the stock of revenue-less companies, have the potential to hold nefarious secrets that create motive to cause harm to people who come into contact with them, including family members, friends, coworkers, and others. This is also inconsistent with "full, true and plain disclosure of all material facts relating to the securities issued or proposed to be distributed," the golden rule of the investment industry, as reported by the Ontario Securities Commission.

This situation forced me to ask the question, "If Paul Antoniazzi had sold options instead of stock, might Nadine Antoniazzi still be alive now?"

After consulting with derivative experts, problems with renaming the stocks of revenue-less companies to options became apparent. This led me to the word speck, which is derived from "speculation," as I have thoroughly discussed and defined with Blasting News.

Instead of RT Minerals Corporation, Paul Antoniazzi's company could legally be required to call itself RT Minerals Speculation. Analysts and promoters could be held to the same standard. Further, equity issued by RT Minerals could be described as "speculity," and its shares could be referred to as "shyres."

This easily legislated change would remove an unknowable amount of motive from Canadian society; motive which many Canadian police forces appear to be oblivious to. I believe that if Nadine Antoniazzi's death is connected to concealing stock losses, a rename to speck prior to her passing could have saved her life. I also believe that this change could save an unknowable number of lives in the future. Further, if Ms. Antoniazzi did, in fact, take her own life, and it was a result of depression connected to her husband's seeming reprehensible business conduct, a rename to speck would appear to have had the potential to stop such a tragic occurrence.

A January 2017 report to Canadian Minister of Public Safety Ralph Goodale stated that "entering precise definitions for stock, equity, speck, and speculity into Canadian or provincial legislation would save lives and provide a more transparent marketplace, with a higher level of 'full, true and plain' disclosure than presently enjoyed, leading ultimately to increased business activity, and a greater level of trust among all involved, potentially improving Canada's image internationally and establishing the country as a leader in financial engineering."

Stock, Speck, Option: Similarities and Differences

 
Stock
Speck
Option
Derivative
no
no
yes
Revenue
yes
no
N/A
Perpetual
yes
yes
no
Voting Rights
yes
yes
N/A
Participants
all investors
qualified investors only
qualified investors only
Worst Likely Outcome
retains some value
loses almost all value
goes to zero
Best Likely Outcome
single-, double-, and triple-digit percentage gains; pays dividends
rare triple- and quadruple-digit percentage gains
rare triple- and quadruple-digit percentage gains

Why is revenue so important?

In business, even more than revenue, which represents the gross sales of a given firm, profits dictate the fortunes of the stock of companies. It has been noted that the U.S. Securities Act of 1933 and the Ontario Securities Act, the two most powerful pieces of securities legislation in North America, do not define what a stock is, despite using the word to define other terms.

Without a legal definition, a sensible place to look to learn more about the nature of what a stock is would seem to be the very first stock ever sold, by the Dutch East India Company, in 1602. The first stock ever sold had both profits and revenues; it also paid significant, double-digit, dividends during its first years. By comparison, the stock of companies like Opawica Explorations or RT Minerals is a joke.

There is such a wide divide between the shares of a company like profitable Dollarama, Inc. (TSE: DOL), the stock of which could be reasonably compared to that of the Dutch East India Company, and revenue-less Opawica that calling the equity of each by the same name is a true disservice to the Canadian public, entirely misleading, and inconsistent with "full, true and plain disclosure."

"Earnings per share is generally considered to be the single most important variable in determining a share's price," writes Investopedia. Doesn't it stand to reason that companies like Opawica, who are unable to even deliver the precursor to earnings, revenue, should be legislatively prohibited from masquerading their equity as being comparable to that of profitable firms, such as Dollarama?

Currently, average, everyday Canadians are being encouraged to save for the future with plans like the Tax Free Savings Account, which allow investors to buy stock in revenue-less companies, without first being presented with disclosure comparable to what an option investor is presented with.

The stock of companies like Opawica Explorations and RT Minerals has had the potential to cause serious financial hardship to those unfamiliar with its true nature, including regular Canadians merely attempting to save for their future, after being encouraged to do so by all levels of government and industry. A rename to speck acts as a warning flag to all those unaware.

© 2017 Stephen Sinclair

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