Barron's takes a blistering look (subscription required) at Bidz.com (NASDAQ: BIDZ) and its executives' long history of relations with shady characters and, possibly, organized crime. You can read the Barron's piece for all the details but here are some key words: fencing, gambling, fencing, strip clubs, "oral copulation with a person under 14 through force or fear," porn shops, prostitution, etc.

But wait: does any of that really matter? There's an argument to be made that if the company is solidly profitable, which it appears to be, and has reasonably sound corporate governance practices, then all those past relationships are just noise that, if anything, present a buying opportunity.

The problem, to me at least, is that there's plenty of other stuff at Bidz that doesn't quite add up. Back in March, ex-con turned fraud fighter Sam E. Antar raised questions about the company's accounting on his blog, and Andrew Left also seems to focus on the company's inventory issues.

Without getting into financial jargon, I can't figure out what makes Bidz so special: it reports strong sales and earnings -- much stronger returns than industry leader Blue Nile (NASDAQ: NILE) -- and Bidz's website is incredibly unimpressive. When you look at the quality of the site and then compare it to the impressive financials, something smells bad. Caveat emptor.

In another piece that has me questioning the quality control over at SeekingAlpha, a post titled BIDZ Shareholders Fight Against Alleged Illegal Shorting has appeared on the site.

The post quotes a letter posted on Yahoo! message board by someone claiming to be a former executive at the company, Matthew Mills: "As most you know, I am the former Chief Operation Officer of Bidz. I have maintained a very close relationship with a great number of the original shareholders of Bidz and still hold a sizeable stock position in the company."

In the post, this Mr. Mills fellow discussed plans he was making with "investors are very well known in the investment community, connected to big name law firms coast to coast and have political ties in Washington DC" to sue "naked short sellers" who were driving down the company's share price.

Rule number one of damage control is, or at least should be, "First do no harm."

After Bidz.com (NASDAQ: BIDZ) found itself on the receiving end of a scathing research report from Citron Research, the company's management decided it had to do something. The stock plunged in the wake of Citron post: -- falling 28.2% Tuesday in addition to a steep drop on Monday. After hitting an all-time high of $22.50 on Monday, the stock closed Tuesday at $11.89.

The conference call that was presumably supposed to stop the bleeding failed miserably: the stock traded down another 21% after hours.

What's all the fuss about? Well Citron Research alleges that "Bidz.com's business model is not sustainable. The large related party transactions, and the background of the individuals involved certainly provide plenty of reason for doubt. It is the opinion of Citron that the recent surge in stock price is completely unwarranted and the company is going to have to start generating real cash under a verifiable and transparent inventory valuation discipline before shareholders can take its earnings seriously."

Bidz.com, an online auction site for jewelry, filed for its IPO about a year ago.

Yet, the deal never got traction and the company withdrew its offering this week. Interestingly enough, the company said the reason is that it could not get some of its shareholders to agree to a lock-up.

To me, this is kind of strange. Lock-ups are normal in IPOs. Basically, they prevent shareholders from selling their stock for a period of time (usually six months after the offering).

And, even when a lock-up expires, there are usually continuing restrictions on selling stock (such as during black-out periods and so on).

OK, so if Bidz.com's shareholders are very interested in selling their stock, how does canceling the offering help things?

I really don't know.

But, given the intense competition that Bidz.com faces -- such as from eBay (NASDAQ: EBAY), uBid, Blue Nile (NASDAQ: NILE) and so on -- I have to suspect there are other reasons for canceling the offering.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Slow morning so far at Bloggingstocks.com but I am bubbling over with story and investment ideas. It is very frustrating to have to recognize your mortal limits on a regular basis. So here is food for thought this morning...

Why in the world are eBay competitors not joining forces to challenge the quasi-monopoly? Why cant Buy.com merge with Overstock.com and embrace Ebid.net, uBid.com, and Bidz.com?

Here are the top twenty sites according to http://auctions.nettop20.com/. Why is that Yahoo Auctions and MSN Auctions or Amazon.com have not helped to facilitate this? The aggregation of these sites might form a true competitor for eBay. What is preventing this? None of them by themselves has shown any real challenge to eBay, but as a group, they might.

Consider this: one set of managers, and accounting departments instead of 20! One central advertising station, cost-cutting gone wild, and the scale of a real web powerhouse! The new entity could use Google Check-out (TM) or it could be Google Check-out!

What is stopping this from happening? Is it big egos? Is it divergent company philosophy? Are you listening Barry Diller? You could do this! Are you listening Ruppert Murdock? Maybe they already have something in the works.

Since nobody has done this, maybe it should be Google. But if they do it, it should be as a wholly-owned subsidiary. A different company. A new ticker symbol. Oh, if I only had the time.

In fact, I think I might do it myself. Why not? I do not see anybody else doing it and I sense a world of demand. Alas, I am just a mere mortal. I sometimes have trouble just collecting my thoughts. I don't know about collecting companies. So maybe it should be a real Titan of Industry.

Any of you Titans out there reading this? Share your thoughts!

Disclosure: I hold no position, long or short, in any of the companies mentioned.

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Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.