Information Management Shares Reverse Course, Drop 20%
Dow Jones Online News, Monday, August 23, 1999 at 18:23
NEW YORK -(Dow Jones)- Information Management Associates Inc.'s
meteoric stock-price rise continued to reverse course Monday with
analysts pinning the reason on profit-taking.
The software company's (IMAA) shares last Friday touched a 52-week
high of $14 - appreciating more than 273% for the week, before sinking
to a $9.938 close. The rise was attributed to individual investor
enthusiasm over the company's buyingedge.com reverse auction site, which
is partly owned by CMGI Inc. (CMGI).
But at the close of trading Monday, the shares were down $2, or 20%,
at $7.938, on volume of 4.7 million, compared to average daily volume of
590,000.
CMGI's @Ventures venture-capital arm invested $7.5 million in
buyingedge.com - an investment disclosed by Information Management
earlier this month when it reported second-quarter results.
Information Management Associates Chief Financial Officer Gary
Martino said the company hasn't released any news that would lead the
stock to decline.
On Saturday, the New York Times noted that Internet chatroom
personality "Tokyo Joe" last week talked up the stock to his
subscribers. The newspaper said one subscriber posted a fake news
release that said Information Management was planning to spin off its
auction site.
The newspaper said connections to Tokyo Joe's Internet site were
disrupted Friday as Information Management's stock fell and quoted
subscribers as suspecting "foul play."
Earlier Monday, Tokyo Joe was once again recommending shares of
Information Management.
James Bjorkman, chief executive of Tokyo Joe's Societe Anonyme stock
advisory service, wrote the New York Times a letter demanding a
retraction or correction of its article. In the letter, which was posted
on "Tokyo Joe," Bjorkman denied the claims of foul play and noted that
the alleged fake news release was a posting that a subscriber copied
from another Web site.
"Nothing nefarious was going on," Bjorkman said.
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