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Strange happenings for ProElite

In addition to EliteXC canceling its planned Sept. 20 event in Albuquerque, N.M., we are receiving word that its parent company, ProElite, has also called off a “Contenders 11” event in the UK that had been scheduled for today. “Contenders” is the “B” brand of Cage Rage, which was acquired by ProElite last year. Several layoffs have also taken place with Cage Rage now down to just three full-time employees.

ProElite also filed a notice with the SEC that they will be late in filing their 10-Q quarterly report for the fiscal second quarter that ended June 30. According to the extension request, ProElite intends to file their second quarter report on Aug. 19.

In other ProElite-related corporate, the company’s stock (PELE.PK) jumped from $2.50/share to $8.00 on Friday. That’s an increase of $5.50 in just one day. There’s no word why the stock suddenly jumped 220% in one day. I could speculate, but I won’t. But I think it’s obvious that something is going on behind the scenes.

25 COMMENTS
  • dedstrk says:

    I think you should speculate. I’m curious to see what you are thinking is going on.

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  • Bryan says:

    I’d guess that CBS has purchased all rights to the company.

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  • Jeremy says:

    Elite filed the same report exactly three months ago. The various changes in the power structure is certainly part of the reason for the delay.

    The old guard is leaving/being pushed out and we are seeing new ones replacing them. The jump in stock price almost certainly is a reflection of ownership/management changes as stock is likely changing hands.

    I think that the secondary brands are going to suffer mightily under the new management. I don’t see them having the same mindset that Shaw and co had about many companies under one umbrella.

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  • dedstrk says:

    I don’t understand why the stock of a company would spike so greatly due to ownership/managment changes. There’s got to be something else to this story.

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  • Sam Caplan says:

    I am trying to figure out just exactly what it is. If anyone reading this is able to help me understand this better, please give me a call. Thanks.

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  • William W. says:

    I don’t know if it means anything, but MMA Hawaii posted a small new item about long time Proelite employee Patrick Freitas leaving as well.

    http://www.mmahawaii.com/content/view/719/30/

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  • DocWagner says:

    It would jump if stable ownership/big name ownership has purchased them. It would go down if they are failing or are bankrupt.

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  • DocWagner says:

    IFL stock is a good example.

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  • darkmetal says:

    Hmm, well generally such a spike in stock value only happens on a buyout rumor, not on a simple switch of management. Such a situation would occur, say, if Zuffa made an offer on the company. While such insider information is illegal, movements like that mean somebody is in the know.
    Or it could be CBS that wants to buy them out.

    I also have to wonder on the cancellation of events, which would not ordinarily be a good thing. Perhaps Proelite/EliteXC are bailing out and searching for an escape hatch?

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  • Sam Caplan says:

    William, thanks for that post. Losing Freitas is definitely significant. He was a key player with ICON.

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  • biggmoney21 says:

    I wouldn’t get too excited about the stock price jumping as it did. Because this happened on very low volume (5,300 shares out of about 55,000,000 outstanding shares…it normally doesn’t trade at all!), it doesn’t really mean all that much. The next time somebody wants to sell 2 shares, the price will come right back down. Also, the “.pk” means that it trades on the pink sheets – a.k.a. the wild west of stocks. Just a little caveat if you’re thinking about buying this stock (or any pink sheet stock, for that matter): be prepared to lose all your money.

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  • Michael says:

    If it is a CBS buy out It is’nt a good idea.These suit and tie guys don’t know what their doing when it comes to mma.See for instance how they pressured Elite XC to hold another Saturday Night Fights Event (Unfinished Buisness)right on the heels of”PrimeTime”and we all knew it was too soon, but those corp smart guys new better.They could’nt sell the Stockton arena out which is unbelieveable and the ratings were pure shit.They are going to have to get someone in charge that understands the sport and knows that you can’t have events as often as zuffa does when your star power revolves around an ageing street fighter and a female fighter (actually i think Gina would kick Kimbo’s ass)There i’ve vented THE END ps if u think Carano kicking Kimbo’s ass is over the top how about Cris Cyborg i know she could.

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  • [...] “Contenders 11″ event in the UK which was scheduled to take place later today. According to the report from Five Oz., Cage Rage now has just three full-time employees. All signs point to the ProElite’s [...]

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  • Jeremy says:

    There is a couple articles on this topic at mmapayout.com that explain it much better then I could:

    http://www.mmapayout.com/2008/08/more-on-proelite/

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  • Toad says:

    Proelite is dead, long live Affliction!!

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  • Jeremy says:

    As the payout article says, Elite stock rarely sells, so a minor transaction (such as a former employee/owner selling as he leaves) could cause such a change.

    I have been following the Elite quarterly reports (and usually posting summaries on the forums of MMAWeekly) and can say that this upcoming one will show the company losing money yet again.

    Elite pretty much is limping from quarter to quarter. The initial signing with CBS gave them a solid cash infusion, but they are in need to more cash to continue.

    While they should have enough to run the Oct 4th show, they would likely be broke at that point.

    If they are able to secure further financing, they would be in a better position to stay active after that high profile show.

    I will post a summary when Elite releases the second quarter report. It should be an interesting one since it will contain the first CBS show.

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  • dedstrk says:

    I can’t see the fact that they changing ownership/management and canceling shows as a reason that their stock would jump so high. Could there be a merger of sorts in the works between Affliction and EliteXC?

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  • Michaelthebox says:

    No.

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  • Jeremy says:

    The spike occured because of a purchase of stock. Since the stock rarely sells, a minor transaction could cause a spike.

    Elite and Affliction ARE NOT merging.

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  • Echolocating says:

    Jeremy wrote: “The spike occurred because of a purchase of stock. Since the stock rarely sells, a minor transaction could cause a spike.”

    A minor transaction? Are you sure about that? Seems awfully simple to manipulate the stock market if that’s all it takes to double your investment.

    Then again, maybe we’re seeing the beginnings of the MMA stock boom, like the dot-com boom where companies with nothing were worth millions based on pure speculation. MMA is where it’s at! Buy! Buy! Buy! ;-)

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  • Michaelthebox says:

    Echolocating: it was a minor transaction, but it was a minor transaction at 8 dollars a share. Just cause that transaction took place at that price doesn’t mean the stock can now be sold for that much. Next time somebody sells it, it will probably drop back down to 2.50 or whatever a reasonable price is.

    When a stock price is listed, it just means that is the last price it was traded for. For a commonly traded stock, that price is almost always close to the current market rate. For a rarely traded stock, any weird price, like $8 a share for Pro Elite, can sit up there for a while until the next trade takes place.

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  • dedstrk says:

    So more than likely the Shaw’s and the other higherups stocks are being bought up by different higher ups in CBS and that’s what caused the spike and that’s how a management/ownership change could make the stock spike that much.

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  • Echolocating says:

    Ah… thanks, Michaelthebox. We’re just seeing the result of what it took to kick Gary Shaw out of his seat then, I suppose.

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  • [...] till att lämna in sina kvartalsrapporter, vilket kan tyckas underligt. Till sist läser jag på fiveouncesofpain att aktiebolaget knutet till ProElite noterat en aktieuppgång på 220 % i fredags, helt utan [...]

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  • Cockney Rage says:

    Cage Wars > Cockney Rage
    FX3 > Cockney Rage
    Cage Warriors > Cockney Rage
    UWC > Cockney Rage
    etc, etc.

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