You mean FirstPlus (FP).
<< that one finance company out of Dallas >>
Remember 125% mortgages? And the staggering swiftness with which that stock fell apart -- that told me that this guy just might be someone worth listening to...
Tearing Down the Internet's Anonymous Posters
By Gregg Wirth
Staff Reporter
9/22/98 4:09 PM ET
thestreet.com
"SELL SELL SELL SELL. . . This doggie is going into the toilet. Salvage what's left of your investment."
-- Mr_Pink_esq,
on a Yahoo! message board for FirstPlus, Sept. 14.
Since stock message boards came into being, Internet posters have slung anonymous missives like blackjacks to bludgeon the shares of target companies. Now, the companies are fighting back, starting a trend that could change the very nature of the message boards.
In several cases, companies have sued to unmask the anonymous posters, whose identities Yahoo! (YHOO:Nasdaq - news) and other companies that run the message boards routinely hand over when faced with court orders.
Once the posters' real names are discovered, the maligned companies have sought legal and financial sanctions against them. For example, as far back as 1996 a lawsuit brought by Fonix (FONX:Nasdaq - news) against an online poster was settled in an unusual way: The poster not only had to apologize online, but also was required to buy shares of the company.
The issue pits Americans' right to free speech against companies' right to protect themselves against false and misleading statements. It also pits the Internet's Wild West culture against the staid corporate world.
Just last week, FirstPlus (FP:NYSE - news), a Dallas subprime lender, issued a press release saying it had identified a short-seller who "disseminated false and misleading information about the company over the Internet." FirstPlus, which hasn't identified the individual or said how it obtained the information, is forwarding the results of its investigation to the Securities and Exchange Commission and reviewing its legal options.
[...]
The most recent situation with FirstPlus brought some heated debate on the Yahoo! message board, including a laughing, I-dare-them-to-sue-me series of posts from Mr_Pink_esq himself, the person FirstPlus is believed to be targeting. In a mock transcript of the case of "FirstPlus vs. Mr. Pink," a poster called justgivememoney jokingly relates the difficulty FirstPlus would have convincing a judge that sophisticated money managers actually sold their shares based on anonymous Internet postings.
The stock price of FirstPlus fell by about two-thirds in less than two months, from around 47 in mid-July to a low of 15 Sept. 11. It has since rebounded and was near 22 1/3 at midday Tuesday. (FirstPlus also recently announced it was beginning talks with potential acquirers about a purchase of the company. Trading in both its stock and options have been active lately.)
The subprime lending arena has been hit especially hard in the recent market downturn. For example, two other subprime rivals, United Cos. Financial (UC:NYSE - news) and Southern Pacific Funding (SFC:NYSE - news), are down 34% and 81%, respectively, over a span in which the benchmark S&P 500 fell 10%.
So whether the Internet messages actually hurt FirstPlus' stock price is open to debate. But the investigation, and similar ones by other companies, could make bigger waves.
(Gee, whatever happened to that investigation...?) |
