In a seemingly never ending story, I share more bad news about Bartercard and its parent company ASX:BPS, BPS Technology. I thank those from a variety of locations who have engaged with me in the last week to help me understand the huge, ungodly mess that this ‘pig’ has become – investors & investment analysis, senior staff, others in the industry and of course disgruntled members. May you all be wiser as a result of finding and reading this blog. Enjoy . . .
BPS Technology (ASX:BPS) is the latest iteration of Bartercard, established as a public company by the “Smiles in Suits” (co-founders and Directors of Bartercard) as a means to extract their ill-gotten gain off Bartercard, their fast-sinking flagship. I have shared at length over the years at how these crooks successfully ripped others off, then pumped and dumped, until finally they were booted out of their own company when others got wind of reality. Insider trading by the head crook led to his hasty exit (also known as “walking the plank”). Another couple were thanked for their services (also known as “getting fired”) so that ASX:BPS has, theoretically under new directorship and leadership got some chance of sailing clean. That’s the theory. My theory though is that it will go the way of the Titanic. Bartercard’s demise is as certain as the sunrise, now currently down to the second-to-last phase in the life-cycle of a typical commercial trade exchange. More on this in a minute.
Here’s a sample of the sort of thing I get all the time from upset punters – generally Bartercard members who are in a pickle with their ‘funny money’ account in disarray – either in credit and unable to spend, or in debit and facing a cash loss as they are forced to cough up cash with their account getting closed for various reasons.
First, from an industry insider:
I have been reading your posts, you seem to be making you[r] mark. Well done on exposing them for what they are.
I understand that BPS just sold off the UK operation for a song.
It would be good if the mainstream media (Fin Review) or something picked up the sacking of the directors and the $30mil write off. Exposure in the Gold Coast Bullitin [sic] isn’t enough.
Thake [sic] care,
It’s thanks to people like this that I can write effectively. A shame his keyboard can’t spell what he tries to type though!. A big thank you to this industry insider for the tip-off, advice and good wishes.
The sale of Bartercard UK is interesting because it was actually ‘sold’ previously, well it was supposed to be! I blogged about this at the time that it was all BS – a paper transaction designed to defraud ASX:BPS investors, showing a multi-million dollar profit when in fact it was a huge loss. I knew and blogged in real-time that Bartercard UK was broke, going backwards at a great rate of knots, and that the announcement of a sale was a falsehood. Huge cash losses where month by month middle and upper management milked it for all it was worth. At the time also these Smiles in Suits were talking about Bartercard UAE when it was also closed – totally. Watch the USA go the same way if it hasn’t already – bankruptcy the first time around with a partial bailout by Ron Whitney & Co. from IRTA to save face for the industry. As regular readers from 4-5 years ago will know, Universal Currency has a VERY large exposure to this currently failing trade exchange (and for a second time around too!) Expect a total loss, Ron, a total loss as I have warned you and informed you of privately.
The word is actually getting out about ASX:BPS in the investment world. I’m happy to share my opinions and knowledge with Fin Review should they call but while I will stand up for the underdog against these nasty, aggressive, greedy and immoral predators, if I wanted to really take them out, I would have released the book Bartercard Secrets by now to their members and taken them on in court to close them down. I’m not an activist per se – more a truth-seeker and truth-speaker – sure, I am helping to push what is already falling but there are sharks by the millions in business.
Talking of sharks, I recently received a cute email from a Bartercard member who is in trouble with these crooks. I helped her of course but she tells it like it is with the phrase, “I feel like a goldfish in a sea of sharks!”. Nice descriptive words!
I also spent more than an hour chatting with a pretty switched on young man who was researching BBX and Bartercard – I was waiting for a plane and had the time to chat. He was getting to grips with commercial barter as a business concept and said this:
I’m 29 years old. I look at Bartercard’s business model and it seems old and quaint [slightly paraphrased]. It’s the sort of thing that people of my generation would never use.
Yup! He’s onto it . . . the phrase he used in regards to the commercial barter industry was an industry in “structural decline”. Speak to Ron Whitney of IRTA and he’ll agree – all the oldies, watching their business for the last decade go down, down, down – just like Bartercard! Reminds me of the watchmaking industry when my father (an ex-watchmaker himself) watched all his colleagues have to retrain when people could buy digital watches that didn’t need repairing every 3 years, and people who sold typewriter ribbon, or fax paper, or double-sided invoice paper for dot-matrix printers.
The structural decline in the commercial barter industry is because the world has moved on from paying pricks like . . . [oops where did that come from?] I mean . . . from paying people like Bartercard commissions of 13% (6.5% buy and 6.5% sell) to bring them new business when the world actually uses Google and Facebook now. Duh!
Our conversation was interesting because for some reason he wanted to speak to Carolin McDonald from BBX and Ron Whitney from IRTA as well as me. It’s 100% clear what his report will contain, I can tell you, and it will NOT be talking up BBX as an ethical operation . . . NOR IRTA! I can also tell you that his understanding of ASX:BPS was pretty jolly good before he spoke to me and his concerns have been fleshed out BIG TIME with a 75 minute call to yours truly.
He had worked out already that Bucqi was a dead-duck. It will die for sure. He knew this because, wait for it, Bartercard told him that. Hmmmm the board presents it as an asset, yet the management know that its a liability! Typical of these guys! With Tess not having sold a thing meaningful in the four years that it has had to fly, it’s clearly a duck, without life, or a turtle or something like the Bartercard ‘pig’. Oh dear, yet again the blogger from Hell is right and the BS from the Smiles in Suits endorsed by IRTA of course, has all been found out!
I found this man’s questioning perceptive overall but in essence he wanted to know if there was anything untoward under-the-hood in regards to Bartercard – illegal activity or ‘naughty’ things that future investors would want to know. Specifics. So, bull, meet the red-rag! This is how I summarised the situation.
The primary ‘crime’ of Bartercard’s owners/management is the concealing of their trade deficit. A
huge, massive, humongous trade shortfall exists within the Bartercard currency. I’ve shared this before online, but they use the GAPP accounting rules to avoid having to disclose this, thus it is off-balance sheet liabilities. In the many hundreds of millions, this represents systemic pilfering (“theft” in regular parlance) over the entire life-span of the Bartercard operations. This theft has enriched those who have had fun at the expense of Joe-Blow – Bartercard members and investors. The result is that the Bartercard Trade Dollar is devalued considerably. The other way of putting it is that inflation has caused the currency to be less valuable than it is claimed – theoretically on par with the local cash currency.
Members can see this when they have to pay a higher price for a product using their Trade Dollars than they do in the cash economy, or more commonly now when it is impossible to buy anything meaningful “on trade”. People don’t want to receive ‘funny money’ that is not worth much for real goods & services that has tangible value. Again, more on this death spiral that Bartercard is going through in a minute. Concealing debt, as Paul Bolte of Bartercard USA has explained so succinctly, is Bartercard’s strength. It is also a prerequisite to fraudulent behaviour. Connect the dots!
The second ‘naughty’ that Bartercard gets up to is tax carousel conduct where the local tax system is actively defrauded. Concealing debt gives a shonky operator the means to game the system. There are many ways to do this, but one of the prime cash producers for Bartercard is to sponsor sports clubs. When Bartercard gives credit to (for example) a soccer club in return for signage, exposure or whatever, they get the sales tax back in cash – VAT/GST is NOT paid back, ever when the Bartercard losses are written off. Do this systemically and you have long-term cash income from Her Majesty’s Taxation Service. While she/he will chase Ewen Me for a $10.00 tax fraud even to jail, she finds it too hard and too messy to investigate any barter fraud. I know this not because I am negative but because senior people both in the industry and in government have told this to me more than once. It’s too hard to investigate and to chase is the essence of this situation, and this situation is inter-jurisdictional too, not just a NZ phenomenon.
The third ‘naughty’ is actual conduct by their staff, management and owners. This is a broad, multi-faceted attitude to rip-offs typical of any large organisation hell-bent on making a buck with a lack of moral ethics. Dishonesty, greed and self-interest abound within Bartercard and can be broken down into cherrypicking; theft and lies/misrepresentation. Cherrypicking is simple to understand and see. It is both casual and systemic. Casual is staff and insiders getting the good stuff before the members have a chance. Systemic is where a certain category of member gets the good stuff through systems – special or elite offerings based on categories are justified commercially but are still a form of cherrypicking. Theft is rampant but this depends upon how deep you want to go in your analysis. The easiest way to understand this from an ethical perspective is to understand that a deception is always associated with a theft. The core reason FOR deceiving is to obtain something that is not genuine. Logical? You bet. So when the fact that a Trade Dollar cannot actually buy what a cash dollar can, yet the company says it can (or should) then theft is occurring. Then this theft goes right back through to the owners who leverage the members’ credit to lie and steal in the millions. When you can create money out of thin air off the backs of the brand and system, who wouldn’t? Except those of us operating on principle not opportunism. Rest very assured that substantial credits are generated for the elite and the associated debt is ‘lost’ through a myriad of techniques used to conceal the debt.
I mentioned before that Bartercard is in the second to last phase in the death of an exchange. If ZERO equals death, when trading ceases and ONE is when trading ceases but the exchange is still technically operating (BBX New Zealand is in this position), then Bartercard is currently sitting at TWO on the scale. Widespread recognition that “the Trade Dollar cannot buy anything [useful]” exists throughout the membership. Most members are in credit (and can’t spend). Management is being laid off; downsizing is occurring; members are leaving; turnover has dropped considerably and profitability doesn’t exist. Everybody knows the score but is too scared to say anything in case they miss out on getting something back for their [worthless] credits. The organisation is desperately milking all members who owe something to the system – goods made available to the system are sold secretly on eBay (Bartercard does this consistently – even a dedicated fulltime girl selling it all!); cash conversions furiously arranged with members in debit balance sued increasingly at any excuse as a cash grab; whistleblowers start leaking and victims gain confidence to speak out; less and less doing less and less with less new business (it is new members who are the lifeblood of a dying exchange) until only suckers are left – those who continue to feed the monster their monthly cash fees because they don’t want to lose out and write off their losses . . . it’s a sad downwards spiral from the heady days when everybody trusted the system.
Because the system is bankrupt through decades of misconduct, there is no way out. Nobody is going to insert the equivalent value of the losses sufficient to return the trading system to balance. The value has gone. The fraud must work to its final conclusion – ONE – it all ceases trading and ZERO – Bye Bye Bartercard.
I can’t see how, but BPS Technology may survive and live to fight another day. Its share price at 30c is still probably too high. I wouldn’t take it is you gave it to me because if I even sell at 10c in the dollar I know that I’d be ripping off the poor sucker who paid even that, and I treasure my capacity to sleep at night. One thing is for certain though, Bartercard is in demise with an eventual death imminent. Who knows when but the die has been cast.
Whew!! Get a load of THAT post will ya? Kinda depressing stuff eh?