What exactly was the miscommunication with Moore?
It seems he understood freedom to ramp up the business (acquisitions and support structure) whereas management did not.
Where might he have gotten that idea?
https://www.sec.gov/Archives/edgar/data/1096934/000156459017024810/syte-ex992_9.htm
"Sitestar will add significant working capital to the business and provide Jeff with the freedom to allocate that capital"
"Sitestar intends to commit the next $10 million of cash that we internally generate to the subsidiary. Some of that will come from debt that we will raise at the corporate level. The initial allocation to the subsidiary will likely be in the range of $3 million.
Jeff will not earn a salary. He will receive an annual bonus based on book value growth with a high-water mark."
I think you can make an argument that management was naive, inexperienced, or, at worst, incompetent. I think it is pretty hard to argue that they have been lying to shareholders or intentionally committing any kind of fraud.
Time will prove which of these diametrically opposed narratives is closest to the truth, but here are some thoughts.
I think you have to incorporate many issues to get closer to reality. I will make an abbreviated attempt that is based in part upon the assumptions and guesses of an outsider:
- The new management discovered many more issues than expected after taking over the company and getting access to information including that
- The business and former management was more troubled than expected.
- The new management may have been very accomplished, well intentioned and highly ethical, but
- inexperienced at the exact challenges before them.
- Add to this the issues surrounding being a very small public company
- that made a couple of material blunders soon after taking over.
If you accept the narrative above, it's easy to explain today's situation while retaining respect for those that were involved.