All-
I found this article interesting from today's Interactive Wall Street Journal, especially the "Field Trip" section:
Fans say he can make them money. Detractors say he's scurrilous. But call
him what you will, former burrito merchant Joe Park has undeniably
become an Internet stock-trading star.
Hundreds routinely follow his online
postings, made using the moniker
TokyoMex. His Web site, Tokyo Joe's
Cafe (www.TokyoJoe.com), has become
one of the most popular stock-chat message boards in cyberspace.
Investors pay him about $500 a year for private access to his
stock-trading strategies. And a number of small companies have been
feeling his clout.
Earlier this year, Rentech Inc., a small Denver
energy and petrochemical company, received a
call from Mr. Park. He said he and his online
followers would be buying a million Rentech
shares, recalls Mark Koenig, who handles investor
relations for the firm. The next day, more than 1.9
million Rentech shares traded on the Nasdaq
Stock Market, about six times its normal volume.
The stock's price leaped nearly 50%, to $1.44 a
share.
TokyoMex then called back. "He said, 'You need
to put out a news release to keep the stock
going,' " says Mr. Koenig, who adds that the company rejected that
request. Tuesday, Rentech closed at $1.21875. Mr. Park says he merely
wanted Rentech to explain in a news release why it was such a good
company.
Internet Gurus
The rise of Mr. Park illustrates the opportunities and difficulties that have
come with the marriage of the Internet and the securities markets. The
39-year-old New Yorker is part of a new breed of amateur traders who
have been transformed through the communications power of the Internet
into stock-trading gurus, complete with their own followers and the ability
to move small-company stocks with the click of a mouse.
The Internet has been fertile ground for those
with some stock-picking ability -- or at least
the ability to make people think they have it.
But it can also resemble an ethical quagmire,
where it's hard to separate truth from fiction,
or manipulation. The U.S. Securities and
Exchange Commission is so concerned about
potential online-investing abuses that it has set
up a cyberspace-surveillance unit to catch
illegal activities. Last week, for example, the
SEC charged 44 companies and individuals
with illegally touting small-company stocks on the Internet.
Mr. Park grew up in Seoul, South Korea, has been a lawyer in Tokyo, a
real-estate investor in Seattle and owner of Tokyo Joe's Classic Burrito
restaurant in Manhattan. He says he dabbled in stocks for years through
brokerage firms, but then in late 1995 discovered Internet chat boards and
a new life. Some of his early stock picks turned out to be winners, and he
began to gather a following.
At Silicon Investor (www.techstocks.com), one of the Internet's most
popular stock-chat operations, more than 1,100 people have
"PeopleMarked" TokyoMex so that they will know when he posts a
message. The next most-followed person has about 900. In addition, more
than 30,000 messages have been posted by Mr. Park and others on his
Tokyo Joe's Cafe site since it was opened in March, making it among the
20 most-visited locations of about 2,500 on Silicon Investor, says Jill
McKinney, administrator of the stock-chat service.
Societe Anonym
Mr. Park says his Web site for paying subscribers, called Societe
Anonym, has about 220 members, from as far away as Indonesia and
Saudi Arabia. (Earlier this year it had 450, but Mr. Park doubled the
membership fee.) Subscribers get access to his nonpublic messages. He
says he chose the group's name because, for the most part, "I don't know
these people."
And vice versa. A recent e-mail message to Mr. Park from a Societe
member in Sweden said, "I don't even know your real name and I am
sending you money, such is the craziness that we have come to."
But there is method in this madness. According to an early mission
statement, Societe Anonym was created to provide group buying power
for "blitzkrieg, quick in and quick out" stock trading. "We only pick stocks
that are sensitive to volume and momentum. It is easy to trigger the
momentum," this document says.
Dale Weaver, a civil-engineering technician and Societe Anonym member
from Fredericksburg, Va., says that for much of this year he has been
averaging about $2,000 a week in profits with the help of Mr. Park's tips.
"TokyoMex has to be the ultimate 'day trader,' " or short-term stock
speculator, Mr. Weaver says.
'Pumping and Dumping'
But Gary Swancey, a former heating contractor and Internet stock player
from Stockbridge, Ga., says Mr. Park and others have used their
followers like "sheep" to push up the price of a small-company stock, then
quickly sell for a profit, a practice called "pumping and dumping."
Mr. Park readily acknowledges "some conflicts of interest where I was
pushing stocks I owned" and then "reaped most of the benefits" when
followers bought in. "That wasn't fair," he concedes. Now, he adds, he
generally tells Societe Anonym about his buying plans at the time he
executes the transactions. He also says he holds stocks longer term and
focuses more on larger-company stocks.
In early April, Mr. Park recommended the stock of 800 Travel Systems
Inc., a Tampa, Fla., travel agency. The stock's price rose within the next
several days to $10 from about $3 on Nasdaq.
In one Internet message, Mr. Park wrote: "I spoke with CEO,,board
meeting on Wed,,,will go full web...imagine what it will do to the stock..."
This was a reference to 800 Travel shifting its sales operations fully over to
the Internet. For much of this year, companies involved in Internet
commerce have been hot stock plays.
Mark Mastrini, 800 Travel's president and chief executive, acknowledges
having talked to Mr. Park but says he never spoke of any plans to sell only
over the Internet. Mr. Park says the conversation occurred.
A Field Trip
In June, a little Boca Raton, Fla., cigar, food and skin-care company
called DCGR International Holdings Inc. paid Mr. Park's expenses to
come to its headquarters in hopes he would put out a favorable word
about the firm.
He did, and the stock rose on heavy volume but then fell back. DCGR
president Don Platten says he now assumes Mr. Park is a "hype and dump
guy" and regrets having courted him. Mr. Park says he sold his DCGR
shares after roughly doubling his money. Eventually, he adds, "penny
stocks always go down. That's why they are pennies."
Each trading day, Mr. Park sits in his Manhattan apartment in front of two
computers loaded with sophisticated stock-tracking software. Business
news blares on a TV. While puffing on Marlboros and sipping orange
juice, Mr. Park receives and sends dozens of e-mail messages a day and
executes orders electronically for his own account.
He can be alternately tender and testy. When a Societe member died
recently, Mr. Park sent out a eulogy wishing "him a bon voyage." But at
another moment, he complains to members about having "to hold every
one's ... hands all day."
During the recent market turmoil, Mr. Park has, like almost everyone else,
been trying to hold his head above water. He says the downturn has
trimmed his personal trading profits this year to under $500,000 from a
high of more than $600,000. He adds that he is still far above the $22,000
he started with in January. |
