I’ve did quite a bit of research on red violet over the past two days and I didn’t like the way the company was created but otherwise found nothing to block an investment. I’m not so sure about their supposed moat. Depth of knowledge is very valuable. Creating a new language to solve a problem is not a real moat but C and UNIX are an interesting example. When AT&T decided it needed a new operating system for their digital switchboards, the coders didn’t like any of the existing languages so they wrote “C.” It was called “C” because it was based on an older language called “B.” With “C” they wrote UNIX which is still going strong decades later as are various descendants of “C.” Over the past several years I developed a Covered Call Selector which has been invaluable in my option trading. A great tool can make a big difference but I don’t know how good a moat it makes.
Insider buying has been quite extraordinary:
https://www.insider-monitor.com/trading/cik1720116.html
Insider buying in perspective (summary)
**Insider Name Shares Price Value ($) %**
Brauser Michael (10% Owner) 471,060 6.50 3,063,435 73
Schulke Ryan (10% Owner) 115,000 5.00 575,000 18
Benz Peter (Director) 20,928 7.04 147,337 3
Dubner Derek (CEO) 19,000 6.01 114,180 3
Reilly James Patrick (President) 8,500 6.98 59,355 1
Swayman Robert (Director) 4,000 5.87 23,480 1
Maclachlan Daniel (CFO) 2,500 5.00 12,500 <1
Michael Brauser is the former Executive Chairman of red violet and Schulke Ryan is the founder and CEO of Fluent. Brauser stepped down during an SEC civil suit
red violet Executive Chairman Michael Brauser Steps Down from Board; Vice Chairman and CEO Derek Dubner Appointed Interim Chairman
September 10, 2018 06:50 AM Eastern Daylight Time
BOCA RATON, Fla.–(BUSINESS WIRE)–Red Violet, Inc. (NASDAQ: RDVT), a leading information solutions provider, today announced that Executive Chairman Michael Brauser has resigned from the red violet Board of Directors, effective immediately. The red violet Board of Directors has accepted his resignation and appointed Vice Chairman and CEO Derek Dubner interim Chairman, effective immediately.
https://www.businesswire.com/news/home/20180910005260/en/red…
The case is being settled…
SEC: Former Riot Blockchain CEO agrees to settlement in principle for alleged ‘market manipulation’
“The staff has reached agreements in principle to settle this action with Defendants Michael Brauser, John O’Rourke, and John Stetson, and their affiliated entities,” the SEC letter said.
https://www.cnbc.com/2020/01/21/former-riot-blockchain-ceo-t…
Being sued by the government is not proof of wrongdoing. My most profitable post 2000 investment was touted by a broker who had also been sued by the SEC and reached a settlement. Research the principals by all means but base your investment on the business itself.
A micro-cap is easy to manipulate and Brauser has put a lot of his money on the line. If I were to buy this stock I would keep a very close watch on further insider trading.
RDVT has no options!
What’s Required for a Stock to Trade as an Option?
Under CBOE rules, there are four criteria a publicly company must meet before options on its stock can be traded on the options exchange:
1. The underlying equity security must be listed on the NYSE, AMEX or Nasdaq.
2. The closing price must have a minimum per-share price for a majority of trading days during the three prior calendar months.
3. The company must have at least 7,000,000 publicly held shares.
4. The company must have at least 2,000 shareholders.
https://www.investopedia.com/ask/answers/04/072104.asp
This is what’s keeping me out of RDVT
Denny Schlesinger