If we can trust the reporting by the fine folks at the Freeport News on Grand Bahama Island, the final nail is being pounded in the coffin of Pegasus Wireless (OTC BB: PGSW.OB). The Pegasus "plant" in Freeport has neither phone service nor electricity, and no one at the plant knows where CEO Jasper "Jay" Knabb is. (I've been trying in vain to reach Knabb for months. If anyone out there knows how to get in touch, please let me know.)
Astute readers will remember that I did a lot of work to expose the shenanigans at this company, from the shady-looking pasts of its officers to the strange claims made by Pegasus stock pushers (and certain gullible, anti-short simpatico Forbes writers) that the company had home-entertainment networking gear superior to solutions from the likes of Apple
I took pains to show that at Pegasus's cash burn rates, there was simply no way things were likely to work out the way Knabb said they would. I also suggested that his brazen attempts to fight short sellers were a decent indication that he had no real faith in his products, company, or vision. He did have a story -- a whole quiver full of them, in fact. The most oft-repeated one involved Pegasus making a pile of acquisitions to build up a billion-dollar company (whatever that was supposed to mean).
Alas, these acquisitions depended on outsiders believing the story, and after a while, people stopped doing so. When he was unable to keep making acquisitions of questionable Asian ventures and marginal computer resellers, Knabb delisted the stock from the Nasdaq and then concocted a feel-good story in the sun and took his operation to Grand Bahama. First, he was hailed as some kind of savior. Then, people began to allege that he was much less than savory, that the entire production story was a "sham," and that he was really spending his time treasure-hunting.
Unfortunately for gullible shareholders -- and the good people of Grand Bahama, who apparently believed his Music Man routine -- Knabb's stories have a habit of being worth less than the paper on which they're printed. And it looks like the final page of this one may be turning.
But Knabb is nothing if not persistent. Pegasus is one of a number of crummy little companies that burned investors when he came on the scene. Hopefully, the next time he puts his head up, investors will have a longer memory. I know I'll be watching for him.
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At the time of publication, Seth Jayson had shares of Inside Value pick Microsoft but no position in any other company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.
