July 7, 1999
Tech Center
Investors Slam CustomTracks's Stock
On Details of Secure E-Mail System
Dow Jones Newswires
AUSTIN, Texas -- Shares of CustomTracks Corp. plunged 19.1%
Wednesday, after the company held a much-anticipated conference call to
reveal details of its planned products, which include a secure Internet
transaction-payment system.
Some analysts said investors apparently were unnerved by the price the
company plans to charge for its secure e-mail system, called ZixMail,
which will debut at the end of August at a cost of $1 a month.
In addition, Chief Executive David Cook acknowledged that his internal
schedule for filing patents for the company's ZixCharge system -- the
secure transaction system -- has been delayed slightly, although he said he
expects the filing within 30 days. The internal delay isn't expected to slow
the launch of the product at the end of September.
Shares of CustomTracks fell $10.31 to $43.56 in trading on the Nasdaq
Stock Market.
Analysts, meanwhile, were mostly upbeat about the company's prospects
during the conference call, saying its ZixCharge transaction system
potentially solves the main barriers to widespread e-commerce: security of
financial data and privacy.
CustomTracks ZixCharge system is designed to process Internet
transactions without making a consumer's personal financial information
available to third-party merchants.
"This solves the major flaws of the Internet" as a vehicle for e-commerce,
said David Weinstein, an analyst with Joseph Charles & Assoc. "Now,
mom-and-pop consumers, who are new to technology, have a fear of
putting their credit card on the Net."
CustomTracks CEO Mr. Cook agreed that the system will be attractive to
consumers who want to shop on the Internet but have fears about putting
their financial data online. He said it also will help curb fraud in Internet
transactions.
Company officials declined to comment on their share-price skid
Wednesday.
But Mr. Weinstein said some investors simply were reacting to a
misunderstanding regarding the monthly charge for the company's ZixMail
system. Mr. Weinstein said many think consumers won't be willing to pay
the fee for e-mail security, even though the product is being targeted mainly
at corporations.
"People began focusing on why do consumers want secure e-mail," Mr.
Weinstein said. "That's not the main market. The main market is
corporations." |
