JR Butts ad says “Corporate executives of a small satellite company just went all-in on their own stock” — what is it?

Top Stock Advisor teases that this is "Like Buying a Brand-new Corvette for $1,000" as "One Small Detail Wall Street Analysts Missed Could Add Six-Figures or More to Your Retirement Account… Starting Today." We check up on the story...

By Travis Johnson, Stock Gumshoe, December 17, 2020

The first version of this article was published on February 21, 2020. We’re still getting questions about it, the ad is still running and appears unchanged, and we’ve updated the article to catch up to speed and check on the current prospects.

This is from an email I received from J.R. Butts, pointing at a teaser ad from StreetAuthority for his entry-level Top Stock Advisor newsletter ($39 “on sale” for the first year). The ad has been running for almost a year now, but was recently re-introduced in a new pitch from Investing Daily, here’s what the December 17 email said to pique our interest:

“Insiders Place $197M Bet On Their Own Company’s Stock

“Corporate executives of a small satellite company just went all-in on their own stock. And I’ve uncovered the reason. An obscure contract footnote other analysts missed could create a $10B a year tsunami of cash that isn’t reflected in the stock price. Investors who buy in at today’s levels could turn every $10,000 into $201,873 or more.”

So that’s exciting, right? What’s the story? Let’s dig into the actual ad, which appears identical to the one we covered in February but is undated…

“If you could buy a new Corvette today for $1,000, sell it tomorrow for $50,000…

“And pocket a quick, risk-free $49,000 profit…

“Would you do it?

“If you would, you’re going to love this opportunity…

“Because a major Wall Street ‘slipup’ means you can buy stock in a little-known satellite company at a price as much as 20X below its real value.”

So no, the newsletter ad copywriters haven’t forgotten that most newsletter subscribers are retired dudes who yearn for the sports cars of their youth… and they even manage to slip in some photos of the sexy Corvettes that get the heart of those folks to skip a beat or two on a cloudy February (or now, December) day.

But aside from copywriters using any excuse to slide in a photo of something aspirational (Corvette, yacht, etc.), what’s the ad about? Here’s the headline once you click through:

“Former Wall Street Insider Reveals…

‘One Obscure Footnote is Your Key to Unlocking a $201,873 Windfall’

“REVEALED: How One Small Detail Wall Street Analysts Missed Could Add Six-Figures or More to Your Retirement Account… Starting Today”

And theres even that partially obscured “secret” document with the highlighted footnote to make it all seem every so official — though it turns out that the ad is mostly about satellite communications and spectrum, and the footnote they highlight is citing an appellate court decision (94 S.W.3d 163) reconciling some competing laws in regards to a personal injury case having to do with some oilfield workers (thrilling stuff… Negligence! Indemnification!).

I don’t know for sure whether there’s some rational connection, or if they just made up the footnote, but the latter seems most likely — there are “footnote” specifics in global spectrum allocations that often come up with satellite companies, since they typically have to follow through to actually launch a service by a particular deadline in order to “hold” the spectrum they’re granted instead of just banking it, but I don’t see how those contractual agreements could have anything to do with this particular citation from the Texas Court of Appeals.

The profit story here apparently begins with a prescient acquisition… more from the ad:

“In late 2019, a little-known satellite company quietly purchased an Internet tech startup at a bargain basement price.

“How’d the stock market react to the news?

“Bupkis… no one cared….

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“But this time…

“They missed something.

“They completely overlooked a detail so massively important, it could add $100,937… $201,873… even as much as $504,685 to your investment account in the next 12 months.”

Butts says that this “obscure footnote” could be worth as much as $10 billion a year for the satellite company he’