Sketchy New Mobile Firm Does Sketchy Reverse Merger

from the not-building-up-much-confidence-here-are-we? dept

Wed, Apr 12th 2006 2:18am — Mike Masnick

Last month, the details started coming out on the latest in an incredibly overcrowded MVNO market, Xero, and they didn't look pretty. The company appeared to be very closely related to Gizmondo, the failed gaming device provider, which increasingly is looking like it might have just been some sort of scam. The execs at Xero mostly came from Gizmondo. The basic "story" ("free" mobile service supported by ads) is essentially the same, and now we can add questionable financial dealings to the list as well. There had been rumors early on that Xero had raised an astounding $300 million -- an amazing sum for a company with basically a me too product entering an extremely crowded market with plenty of questions concerning the exec team. Now, MocoNews is pointing out that the company has pulled off a reverse merger, to basically backdoor its way into the public markets without doing an actual IPO. While not every reverse merger of this nature is problematic -- it's usually a pretty big warning sign of what's potentially a pump-and-dump style scam. Considering all the questions surrounding this company, you'd think they wouldn't go for such a questionable strategy -- unless they really have nothing else (which, again, would be a red flag). Hopefully the next thing won't involve paying these execs exorbitant salaries while giving them insanely expensive luxury cars for them to race around in -- leading to all sorts of other trouble. It's also worth noting that the original story on Xero mentioned that former Gizmondo CEO Carl Freer was helping Xero raise money in Los Angeles. Of course, perhaps part of the reason he was in LA, rather than the UK, was because his former lawyers back in Great Britain are suing him for nearly a million dollars in unpaid fees. Really adds credibility to the company, doesn't it?

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9 Comments

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Tin Ear, 12 Apr 2006 @ 4:13am

Hmmm...
You would think that with $300Mill in assets he could pay a paltry $1Mill in fees...
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ibeetle, 12 Apr 2006 @ 5:46am

I am headed to EB Games right now!!
MAN! I have to get to EB Games right now and cancel my Gizmondo pre-order. :0)
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Chief Elf (profile), 12 Apr 2006 @ 6:05am

Xero?
Xero=Zero=Nothing?
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Real Dealer, 15 Apr 2006 @ 7:06pm

Xero
Boys, what if it work's... This could herald a new form of media... Keep an open mind. If the bastards pull this off it could be big!
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enzoman, 18 Apr 2006 @ 5:43am

XERO is ZERO
Total Scam, all the players are Ex-Gizmondo, Carl Freer and Stefan Erickksen are the majority shareholders behind this. Just another Pump-n-dump like Gizmondo (see link http://finance.yahoo.com/q?s=tgtl.pk). Freer and Erickksen know their name is dirt so they are hiding behind the magic curtain now. Their plan is to steal the money and let the Ex-GIZ Exec's take the rap this time. They have not raised any money either...part of the scam. I would live to see that bank statement.Thats why they went to the Pink Sheets...there is no compliance to Sarbanes Oxley there. It's 300 million of Freers Bullshit.
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go big, 18 Apr 2006 @ 9:42am

Learn the facts
Funny how not to many people that post here have any clue what they are talking about. Enzoman...why don't you get your facts together and then post. Try reading the SEC filings on Gizmondo and then come back to this site with an educated and factual post. It is ok to post opinion because you are entitled to yours, but don't post comments that have no factual evidence to back them up.
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- Enzoman, 19 May 2006 @ 3:43pm
  
  Re: Learn the facts
  Don't you guys hava a company to run, whay are you spending so much time in blogs trying to re-establish your street cred. It doesn't take a rocket scientist to read the LA Times everyday and get the same story. Buy the way, I didn't know they had a computer in County Jail. I guess we will be reading about the rest of the gang shortly. Where can I get a Commissioners badge? I hear you have a connect. And by the way, SEC does not stand for Super Educated Criminal. Tell Dietrich I said hello, oh I mean Carl.
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  - go big, 30 May 2006 @ 2:03pm
    
    Re: Re: Learn the facts
    Enzoman. You said everything I need to know about your intelligence. If you get your info from the LA Times, you are not someone that should be posting as if you are educated. It is obvious you don't know much and have no idea how the media operates. It is so easy to say the stuff you do when you can hide behind a computer. You obviously did not read any credible sources of information...
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Howard S, 27 Apr 2006 @ 1:28pm

Carl Freer is in jail for buying guns with a phony police badge.

http://cbs2.com/topstories/local_story_117003409.html

http://www.latimes.com/news/printeditio n/c...s-pe-california
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