Rightscorp loses big on extortion racket


#1

[Permalink]


#2

It is rather quaint the number of these “people” (and I do use the term loosely) think that they can use the law up until the point it becomes to hard for them.
Their model is a different take on the standard model. We use the big legal threat and then offer you this “easy” way out & to settle up. Of course if we discover more tracks beyond the first bill, we’ll want to collect on those too.
$150,000 is a stupid number. It is from a bygone age and now is nothing more than a large barking dog with no real teeth. The problem is most people can’t stop to check the teeth as they are being barked at and the dog rushes forward.

Nevermind that they have sold snakeoil to the industry before, and walked away when it failed.
They don’t like to mention that. That they sold the salvation in the past from their wagon and then rolled out of town before people noticed that the patent medicine didn’t work. Their coffers were full, and that is all this is about. Selling salvation to people who want the easy quick fix, when the real solution to the problem might be hard.

Given that they felt the could ignore the legal president until SCOTUS ruled on it (when they hadn’t bothered to try to advance a case to get a SCOTUS ruling) it is not surprising they are facing legal problems and in my humble opinion (that thing I am still allowed to have despite the lawsuits & a lawyer calling me a psychopath in a court filing) I fully expect Rightcorp will be hollowed out by the time the multiple lawsuits against the company move forward. In the mean time they will keep selling salvation out of the wagon before blowing town and painting a new name on the side selling the same snakeoil to groups who should know better, but think maybe this time the medicine will save us. For companies so against technological advances, they keep buying “new” technology to save them.


#3
“The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. If the Company is unable to obtain adequate capital it could be forced to cease operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.”

Translation: “If we’re going to make money, we have to make money. But it looks like we can’t make money, so we’re not going to make money.”

Was this written by a 7th grader trying to fill space and get their 3 paragraph minimum?


#4

The company made $931,000 in $20 “settlements” in 2014, but lost $3.4 overall.

I don’t understand. They lost $3.4 overall and they may declare bankruptcy? Couldn’t they cut a single cup of coffee from the budget?


#5

Compensation for the fine leadership is of paramount importance.
Pay yourself first, then worry about the little stuff.

So what if you are paying yourself twice the income, you are the boss you deserve it.


#6

It’s more like, “We’re not making enough money because we don’t have enough money to make money. If we’re going to make money, someone will have to give us a lot of money first.”

I hope no one will be stupid enough to invest in them and drag this out for anther year or two.


#7

Yeah, Capital and whatnot. I forgot that capital actually has an operational definition other than money.


#8

“Sales.”


#9

Probably obvious by now, but just in case:

That should be $3.4 million overall, based on the source article.


#10

I was thinking, let’s all short Rightscorp and win big! But it can’t really go too much lower:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=RIHT&insttype=Stock


#11

There’s the stupid part right there. Most people, starting a business, would pay themselves the profits, and that means they go hungry the first year or two. But people who are well-connected seem to be able to raise a pot of cash and pay themselves a generous salary right out of the starting gate. I sure wish I was better at running that con a business.


#12

Here is the sad truth about ever single “stop pirates now” schemes.
The creator gets paid well, and then cashes out.
They develop enough buzz, they get acquired by a larger fish, and they are out.
Most of them have ties into the industry when they have this magical idea that will solve all of the piracy problems, for a fee.
RightsCorp has been floundering because they can’t generate any buzz.
All of the media coverage, outside of their SEC filings & PR spin, is them being sued, them bleeding cash, them getting shit returns for the clients, oh and talking about how they did this stunt last time and will never mention it on their resume. See also fightcopyrighttrolls.com for an indepth listing of their previous failings.
Also some “interesting” charts showing odd stock price bumps right after a PR spin cycle, natural bumps or pumping a stock price up by buying it… I can’t say I’m not the SEC… but if it looks fishy it might be a fish.

To win this con, you need to not have any concern if it actually does what you promise. It has to generate some results (and even false ones work because uninformed people when confronted with the threat of owing $150,000 in court tend to pay to make you go away). Look at the heart of 6 Strikes in the US, the firm was founded by an industry attached person, who cashed out when it was acquired by another firm, who cashed out when it was gobbled up by a conglomerate who is selling the services to the **AA’s. Their system appears, from available data, to be recording ips from a copy of an off the shelf torrent client that prohibits its use in gathering IP addresses in the manner in which it is being done. Failure is easily blamed on pirates adapting but snakeoil 2.0 will catch them… until its time to sell them snakeoil 3.0.

They dreamed big… but as tends to happen to trolls who cross my path… bad things happen. But then their abject failures in the past might just mean they aren’t very good at this game.


#13

Cool. I have a business idea now…


#14

I’m not sure they failed that big. The company made $931k in settlements and the company lost $3.4M overall, so that means the outgoing cash was $4,3M. That money didn’t disappear into the aid.

Since they are publicly traded we can look up the CEO compensation on their SEC filings. It turns out that Christopher Sabec and Robert Steele are paying themselves a measly $150k (with a $60,000 bonus in 2013). I’m not sure they are satisfied with that, but from an outsider perspective they aren’t losing on this deal.


#15

It depends…are they shorting the stock now?

On an unrelated note - We tend to focus of specific actions when grift has become something with a life cycle. The end of a company is an opportunity to rake more out as well. Shorting, busting out assets, restructuring and offloading liabilities. Then - fire up another round.


#16

Just know I’ll be there when you do.


#17

That is the CEO compensation, my question would then be what other hats they wear.
Are they paying fees to something for licensing the tech?
Do they have a connection to that something?

And my statement was about the last 2 companies they founded selling the same snakeoil that went belly up. They had the tech that was going to save the industry… until the companies were folded and they hid references to being involved with them from a casual look.


#18

Yeah, I was a little surprised to see only $150,000 each in compensation. I thought it would be a lot closer to half or more of the outgoing money. I guess they are probably more clever than to do so in a way that would show up in a publicly searchable document.


#19

Well they are “publicly” traded now, and investors might ask questions why the outlay to the principles was so high.
But as they can hide everything about their supersecret tech as a trade secret, one must wonder how much they are paying the patent holder for the patented methods they are using.
Who holds the patent?
Do they have their own internal division running the scans, or is it a contracted 3rd party?

I am sure everything on paper is to the letter of the law, and layers upon layers of obfuscation about how much everyone is getting paid via other parties.

One can only hope that the willful violations of the law they are committing, and being sued for, rise to a level where the veil is pierced. I think everyone would be curious how this sausage is made.
Given how little they think of the law as it applies to them, and how far they want it to stretch to suit their needs… I’m just guessing it’ll go well for them.


#20

Well, I recall reading extensive reports about Prenda and how they had created a shell company under the name of someone’s college roommate to pretend they were serving an outside client when really the lawyers who started it were the only ones who stood to profit. Of course, I think they were recommended by a judge for disbarment, so, your initial comment about things not working out well would probably apply to them.