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I worked at ROO Media (which KIT Digital acquired) and met with Kaleil a number of times. None of us who worked there are even remotely surprised. No signs of
by dberg 11y ago
I worked at ROO Media (which KIT Digital acquired) and met with Kaleil a number of times. None of us who worked there are even remotely surprised. No signs of revenue, yet we would spend like crazy and even acquire companies with magical "stock money".
It was the most corrupt place I have ever worked in my life. The COO was a ghost who just spent money (like staying at hotels all the time, even though he lived an hour away by train) making 400K+ at a startup with no revenue, the CEO (who Kaleil replaced) drove the company into the ground and subsequently started another startup that is now under lawsuit as well after lying to his employees and not paying them for months. Absolutely crazy stories.
Happy to answer any questions :)
- late2part 11y agoWhy did you keep working there?
- dberg 11y agoI worked with some great people, and we all had hope we can jointly help turn things around. Obviously , we were wrong. In retrospect, we should have went to the board like we discussed and tried to salvage the company which could have had a decent product, were it not for the constant corruption and idiotic decision making.
- tristan_b 11y agoHey Alan! - Tristan here... I remember those times.
- api 11y ago"like staying at hotels all the time, even though he lived an hour away by train" Who invests in these things? Even more puzzling: how is it that these hucksters keep raising money to found another startup? I've seen this phenomenon before. I called them "financial serial killers" -- hustlers who raise money, vaporize it all, then raise again. They're "serial failed entrepreneurs," and we're not talking failures where they legitimately tried. We're talking failures that involve lots of stupid asshat money-burning and nothing much of substance at all. My mind boggles. It's like there's some clique of investors out there who believe in supporting sociopaths as some twisted form of philanthropy. Either that or they're making money too through some as-yet-mysterious means. I do have one total speculation: Is it possible that there could be some kind of money laundering going on here? Are these money-burning "investments" actually something else? Sometimes stupid things actually aren't stupid if they're viewed from the right perspective, and things that make no business sense might actually make a lot of sense in some other way.
- tristan_b 11y agoIt was a publicly traded company.
- api 11y agoI thought you had to meet certain criteria to become public, like showing X quarters of consecutive growth and bend-over-and-grab-your-ankles audits and such? Or is there some wild west of penny stocks and cocaine that I don't know about?
- dberg 11y agoThey were a pink sheet stock (Penny Stock), not sure if that made things different or not.
- api 11y agoMaybe those regulations only apply to the exchanges. Tangentially I read about an interesting money laundering technique once. Apparently you can take two low-volume stocks and use them to launder money by effectively committing financial fraud against yourself. It works like this: 1) Take a small amount of clean money and average into a position on a cheap low-volume stock. 2) Take the dirty money and use it to pump the stock by buying in and driving it up. 3) Sell your position on the clean side. Then pick another low-volume stock and do the same again. Apparently variations of this technique can be used to smurf money across the market. You'll lose some in the transfer but that's cost. The dirty money appears to be "lost" in the market, while the clean side books short-term capital gains. I'm sure experts would know how to calibrate their smurfing rate to avoid SEC scrutiny and minimize side-channel losses. Seems like something that could be automated with an algorithm. The illegal drugs industry kicks off such obscene profits that there's probably an enormous market out there for creative ways to launder it all.
- dberg 11y agoI Think this is close to what he was doing. He had an investment bank friend that would just constantly sell and buy on the stock to look like there was "activity". In the end it was the same person selling and buying massive amounts of stock.