Frank Holmes, the CEO and majority owner of U.S. Global Investors who donated between $250,000 and $500,000 to the Clinton Foundation in 2007, is changing his story. He now admits his company owned stock in Uranium One in 2011.
In an appearance on CNBC’s Squawk Box Tuesday, Holmes stated that U.S. Global Investors, which profited from its investment in UrAsia Energy stock when it was acquired by Uranium One in 2007, owned no stock in Uranium One after 2008. The CNBC hosts were skeptical of Holmes’s claim, pointing to a March 31, 2011 quarterly report filed with the Securities Exchange Commission (SEC) by U.S. Global Investors that showed it owned $4.7 million of common stock in Uranium One at the time.
ARMZ, a company owned by the Russian Government, acquired a majority interest in Uranium One, the Canadian company that at the time owned 20 percent of all the uranium deposits in the U.S. in a controversial transaction that was approved by the secretive Committee on Foreign Investment in the United States (CFIUS) in 2010. A representative of then-Secretary of State Hillary Clinton was one of the nine member CFIUS panel that approved the deal.
The stock price of Uranium One skyrocketed from $3.52 per share on August 31, 2010 when shareholders approved the deal and were notified it had been submitted to CFIUS approval to $5.75 per share on December 7, 2010 one day after the public was informed the deal had been approved. In addition, Uranium One shareholders received a one-time special dividend of $1.06 per share on December 20, 2010.
Any public company that purchased stock in Uranium One on October 1, 2010, when it was trading at $3.47 per share, and sold it between December 21, 2010 and December 30, 2010, when it was trading between $4.75 and $4.77 per share would have made a handsome profit on the capital appreciation of the stock. It would have also received the $1.06 per share one-time special dividend issued on December 20, 2010. Under the law, the company’s ownership of the stock during the quarter would not be disclosed in its filings to the SEC.
SEC documents are filed quarterly, and reflect U.S. Global Investors’s actual holdings on the final day of the quarter. As such, they do not provide any information on ownership of stocks purchased after the first day of the quarter and sold in their entirety before the last day of the quarter.
The third quarter N-Q report filed by U.S. Global Investors reflected its ownership of a portfolio of stocks as of September 30, 2010. The annual report filed by U.S. Global Investors reflected its ownership of a portfolio of stocks as of December 31, 2010.
Breitbart News has asked U. S. Global Investors to confirm that it did not own Uranium One stock at any point in 2010, but has not received a response.
The New York Times, citing a first quarter 2011 N-Q report submitted to the SEC by U.S. Global Investors, reported on April 24 that the company owned 1.2 million shares of Uranium One common stock on March 31, 2011, valued at $4.7 million.
In his Squawk Box appearance, Holmes said his company’s ownership of Uranium One stock was “long gone before 2008.”
[W]hen CNBC host Joe Kernan asked Holmes when he bought and sold the uranium stock, Holmes’s answer contradicted CNBC’s fact box.
“We were long gone before 2008,” claimed Holmes.
“You didn’t own it when it was acquired by the Russians ?” asked Kernan.
“Uh, by the, by what the date is. I bought it early and I sold it before 2008,” said Holmes, before adding that he gives money to orphanages.
“You sold the stock in 2008?” asked Kernan.
“We were long gone well before all that,” said Holmes.
Three CNBC hosts tried to get Holmes to acknowledge that U.S. Global Investors owned stock in Uranium One in 2011, but Holmes refused to do so, changing the subject to his charitable giving.
In a post written on his “Frank Talk” blog Thursday and linked to the U.S. Global Investors website, however, Holmes admitted that the company did, in fact, own $4.7 million in common stock of Uranium One on March 31, 2011. It was, he argued, a “re-investment” in Uranium One after the ARMZ transaction had been approved by CFIUS in 2010.
“The graphic that CNBC showed on-screen during my interview [showing US Global investors owned $4.7 million in common stock of Uranium One in 2011] included a single, incomplete factoid,” Holmes wrote.
According to Holmes, U.S. Global Investors invested in UrAsia Energy, the company founded by Clinton Foundation mega-donor Frank Giustra, in 2005: After “UrAsia was acquired by Uranium One…U.S. Global Investors sold all positions in Uranium One in 2007.”
“U.S. Global Investors re-invested in the company in the first quarter of 2011 and sold all positions before the end of the second quarter of 2011. We exited the position when uranium prices began to decline after news of the Japanese nuclear tragedy,” Holmes stated.
Breitbart News has confirmed that SEC documents do not reflect any U.S. Global Investors ownership of stock in Uranium One in 2008, 2009, 2010, or in any quarter of 2011 other than the first quarter ending March 31, 2011.
However, Holmes’s claim that “[w]e exited the position when uranium prices began to decline after news of the Japanese nuclear tragedy,” is not consistent with the facts, or even with the chart Holmes provided on his blog that compares the price of uranium oxide with the 2011 dates U.S. Global Investors purchased and sold stock in Uranium One.
According to that chart, U.S. Global Investors’s “re-investment” in Uranium One stock began in mid-March 2011, after the price of uranium oxide plummeted from $70 per ounce on March 11, 2011 to $50 per ounce around March 15, 2011. The Japanese nuclear tragedy at Fukushima took place on March 11, causing the price drop.
U.S. Global Investors purchased Uranium One stock during a one week period immediately after that steep price drop began, apparently betting that the fall in Uranium oxide prices would bottom out. The stock price in all uranium companies dropped precipitously during that first week after Fukushima.
Uranium One was one of those uranium companies whose stock price took a hit. On March 9, 2011, the company’s stock was trading at $6.01 per share, but one week later, on March 16, 2011, it had dropped to $3.52 per share. The SEC filing indicates that U.S. Global Investors purchased the 1.2 million shares of Uranium One it owned on March 31, 2011 at an average price of $3.92 per share.
When U.S. Global sold its 1.2 million shares of Uranium One in May 2011, the price of uranium oxide had stabilized, as had the price of the company’s stock.
On April 28, 2011, the price of uranium oxide was $56 per pound. On May 24, 2011, it was $58 per pound, according to InfoMine, which “provides charts and data for the mining industry,” according to its website.
For his part, Holmes tried to blame CNBC for his own poor communication skills. While most media outlets reported that it was Holmes who was in a haze during his Squawk Box appearance, Holmes titled his blogpost “Clearing up CNBC’s Haze” (emphasis added):
Yesterday on CNBC, I was asked about my investment firm’s previous investment in Uranium One, “Were you in a position to benefit from approval of this deal at the same time that you were writing checks to the Clinton Foundation?”
My answer was clear. I said, “No.”
It would be unusual for any Chief Investment Officer to recall from memory the specific dates of ownership of an individual security among thousands of investments over a decade-long time period. I was not asked to provide this detailed information in advance. Nevertheless, while I was being bombarded with questions from three different anchors, what I said was absolutely correct: U.S. Global Investors invested in Uranium One early and sold it long before the events in question by CNBC and other media sources. . .
“Giving back to those less fortunate is how I demonstrate gratitude. Gratitude is the single driving force behind U.S. Global’s charitable contributions. We have a long history of charitable contributions to many organizations. The Clinton Foundation is only one on a long and varied list.”
“As I said during my appearance on CNBC, our donations to Clinton charitable organizations and our investments in Uranium One are separate events. One has nothing to do with the other. Any claims to the contrary are not only offensive, but patently false.”
Rather than convincing a skeptical public that he did not benefit from the ARMZ-Uranium One “deal at the same time that [he was] writing checks to the Clinton Foundation,” Holmes’s most recent statement serves only to heighten interest in further disclosures about U.S. Global Investors transactions.