Pre-Paid's Pickle Gets Juicier

"I don't want to believe that the company doesn't want to make sales," he said. "But all they ever ask me is how my recruiting is going. And I just have to tell them, 'I'm not into that game.'"

The associate went on to say that Pre-Paid has actually bypassed opportunities to add thousands of customers who would simply use the service instead of selling it.

"Maybe they just don't want to present the plan to educated people who might stump them," he said. "Then, they wouldn't look so smart."

Short Tempers

At the moment, the same could be said for investors betting against Pre-Paid stock. The company's shares have held steady in the middle of their 52-week range in spite of a number of negative developments over the last year. This despite the fact that a huge number of shares have been borrowed by short-sellers hoping to make money by selling out as the stock falls.

In the past, the company has asked shareholders to prohibit brokers from lending out their stock to short-sellers. Meanwhile, the company has stepped into the market with large sums of money -- some of it borrowed -- to make stock repurchases that create what some say is the only real buying pressure on the shares.

Last month, the company announced that it would borrow $25 million -- on top of the $10 million it's already paid off -- to keep the buybacks going. By now, the buybacks have cost the company so much that shareholder equity, a measure of a company's net worth, has nearly vanished.

The company is also borrowing some $20 million to help fund construction of a new headquarters in its rural base of Ada, Okla. The company says it long ago outgrew its modest home on Main Street and desperately needs more space. But locals familiar with construction of the new building -- scheduled for completion this year -- say the elegant top floor is actually reserved for the CEO's living and entertainment quarters.