The E-Sylum:  Volume 9, Number 22, May 28, 2006, Article 22

ARTICLE: ESCALA U.S. DIVISIONS IN JEOPARDY?

Investment newsletter Motley Fool published an article this
week about Escala, owner of a number of U.S.-based coin trading
firms:

"Can stamp-and-coin-trading firm Escala survive the fallout of
its majority shareholder AfinsaBiene Tangibles being charged as
a criminal enterprise by Spanish authorities?

If you listened to company management on its 15-minute public
relations conference call this morning, you'd think so. The company
took no questions, using the time to essentially reiterate what
everyone already knew from the news reports. One tidbit management
did reveal: Without the Afinsa relationship, Escala would have
reported a loss of $1.7 million rather than a $10.4 million profit.
Even with the company's insistence that it still hasn't been charged,
and that it can operate even without Afinsa, where will the money
come from in the future?"

"Executives and directors have been fleeing Escala like cockroaches
scattering when the kitchen light turns on. The CFO resigned. One
vice chairman has been arrested and jailed, an Afinsa-linked director
resigned, and one of three independent audit committee directors
resigned, even though he was asked to stay on to help deal with
the mess.

Vice Chairman Greg Manning, who founded Escala back when it was
called Greg Manning Auctions, has not been heard from since the
scandal broke, and he did not participate in today's conference
call. Perhaps there's a reason he was sent packing off to Asia."

"Escala's assets -- including the 18 disparate operations like
precious-metals trader A-Mark; stamp-trading houses Aucentia, H.R.
Harmer, and Heinrich-Koehler; and coin wholesaler Spectrum Numismatics
-- could very well be appropriated to make whole the Spanish investors
swindled by Afinsa."

To read the complete article, see: Full Story

  Wayne Homren, Editor

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