Re: ZixIt sues VISA
(from Briefing.com)
ZixIt (ZIXI) 38 5/8 -1: In the truth is stranger than fiction category -- ZIXI filed suit against Visa on Friday, alleging that Visa "interfered with ZixIt's business relationships and disparaged ZixIt, its products, its management, and its shareholders." A lawsuit is of course not strange in the business world, but the evidence cited for this suit is indeed weird -- ZixIt alleges that Visa's VP of Technology Research posted more than 400 messages on the Yahoo! (YHOO) message board for ZIXI under various aliases. ZixIt even posts the expletive-laced messages on its website. In its press release, ZixIt also claimed that Visa admitted that the employee had posted anonymously on the Yahoo! boards and notes that the posts stopped as soon as ZixIt alerted Visa to the issue. Aside from the Yahoo! posts, the only evidence that ZixIt cites for its suit is this: "December 17, 1999 - ZixIt receives an email message from a prospective financial institution partner. The email message indicates that the financial institution had 'talked with two people at Visa' and that there were 'Visa objections' regarding a proposed arrangement with ZixIt." There was no further information regarding that email, and the ZixIt press release devotes most of its attention to the anonymous posts on the Yahoo! boards. We admit to not knowing all of the applicable laws here, but we can't help but be amused by the fact that a company is claiming that it was damaged by posts on the Yahoo! boards -- is it really possible that their business prospects were damaged by profane posts on Yahoo? Would a Citibank executive sift through these boards before deciding whether or not to do a deal with ZixIt for its ZixCharge service? In a comment regarding ZixCharge to the Wall Street Journal Texas edition back on September 8, CEO David Cook said "If we don't get some financial institutions signed up by the end of the year, sell your stock." But instead of ending the year by signing a financial institution, ZixIt sued one instead. This was the second lawsuit of 1999 for ZixIt, the first was a lawsuit against Critical Path (CPTH) on May 27 that was dropped by ZixIt on June 9 -- the company claimed that CPTH violated a confidentiality agreement but dropped the suit after determining that CPTH had not violated the agreement. We attempted to contact ZixIt to get an update on the Visa lawsuit, ZixCharge, and ZixMail, but as with all of our past attempts at phone and email contact, this one has thus far proven unsuccessful. Our opinion from the start has been that ZixIt as an investment is a dubious proposition -- there is no question that the market for secure email and transactions is huge, but with no revenues as of the quarter ended Sep 30 and no financial institutions signing up for its ZixCharge service, there is still no proof of concept here. If either the ZixMail or ZixCharge service can gain some traction in the market, we might become believers, but thus far the company has been more successful at making bold claims and reading their own message boards. - GJ |
