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GlobeTel Still on Hold

Unfortunately, today has been a tough day for those investors who believe in GlobeTel (AMEX: GTE  ) . Another missed deadline, another excuse from the penny-stock superstar that promised us WiMax blimps but which is now having trouble delivering the millions of Russian funds it said it would have in hand by now. The market's patience appears to have worn off, and today, the shares have dropped by as much as 30%.

If you're new to the story: GlobeTel recently outlined a deal that would launch it to the head of the pack in Russian wireless Internet and telephony via a partnership with a newly minted Russian company fronted by a man who says he made his fortune in "rare earth minerals." In the abstract, the story you need to believe is that GlobeTel's HotZone "radios" (as CEO Tim Huff described them to me) and technology are superior to what's offered by established Internet and communications companies such as Cisco (Nasdaq: CSCO  ) , Nokia (NYSE: NOK  ) , and Motorola (NYSE: MOT  ) -- not to mention Russian providers like Vimpelcom (NYSE: VIP  ) and Mobile Telesystems (NYSE: MBT  )

In January, Huff laid out an ambitious timetable, but the company has missed the money mark three times so far. The latest excuse was that the money was pending a bank syndicate's "analysis of this GTE business plan." Before that, it was "internal bank scheduling," which didn't seem to square with the last excuse before that, which was regulatory issues.

I wish I could say this surprised me, but the more I look into this firm, the more nothing shocks me. Months ago, The New York Post's Chris Byron reported on GlobeTel's cozy relationship with a NASD-punished consultant and stock promoter, Paul Taboada. And we saw how GlobeTel promised big things for what turned out to be a near-worthless Australian telecom that was the focus of a massive fraud.

And there's a lot more to wonder about, like some pretty heavy selling over the past year by insiders and large shareholders. Most recently, the COO filed a planned sale of more than 500,000 shares.

Does that sound like the kind of thing you'd do if you knew the company was on the verge of a giant, year-in-the-making Russian WiMax deal? A Russian WiMax deal plus a blimp breakthrough? It sure doesn't to me.

In the meantime, the recent press release doesn't exactly inspire confidence. The closing paragraphs begins, "Should such a funding commitment not be forthcoming by the end of this week, or unless the banking syndicate provides written assurances to GlobeTel of the imminent delivery of such commitment, GlobeTel will have no choice but to exercise its right to default the contract for non-payment."

Looks like we've got a few more days to find out how this all plays out.

For related Foolishness:

At the time of publication, Seth Jayson had no position in any firm mentioned here. View his stock holdings and Fool profile here. Fool rules are here.

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