INTERNET STOCK NEWS (TM)
internetstocknews.com
Insight For The Intelligent Internet Investor
July 27, 1999: Mid-Week Update
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STARNET COMMUNICATIONS' BOGUS LAWSUIT & UPCOMING EARNINGS
As if the wild gyrations of Internet stocks were not enough, many investors
panicked today on news of a $1 billion lawsuit against Starnet
Communications (OTC BB: SNMM). The news was generated in the form of a
press release issued by a company called Las Vegas Casino, inc., claiming
to be a licensee of Starnet's wholly owned subsidiary, Softec Systems
Caribbean, Inc.
Las Vegas Casino claimed damages from what they called "a very substantial
number of breaches of agreement" including "grave irregularities in their
accounting systems, too many serious bugs in their software; their
technical and e-cash support is extremely deficient, with very serious
problems such as massive over-billing of credit card accounts."
As might be expected, the price of Starnet shares plunged, going from the
day's high of 22 11/16 to 10 in a matter of minutes after the release.
Hopefully, ISN readers were not among those unlucky enough to have sold
their shares at $10!
Shortly after, Starnet issued a press release denying it was in receipt of
a lawsuit. Starnet shares rocketed to near $16 before finally closing the
day at 14 7/16.
The price action was so astounding, the well-respected CBS Marketwatch
reported on the bogus lawsuit as well:
(http://cbs.marketwatch.com/archive/19990727/news/current/all_aboard.htx?source=blq/yhoo&dist=yhoo)
After the market closed, Starnet Communications revealed that its
wholly-owned subsidiary, Softec Systems Caribbean Inc., had indeed licensed
software to Las Vegas Casino but the agreement had been terminated on July
23, 1999 due to non payment of approximately $203,000 for monthly licensing
fees and had commenced collection proceedings against Las Vegas Casino,
inc.
A recent article published on RGTonline entitled "Who's on First"
(see: www.rgtonline.com/newspage/artlisting.cfm/2773), noted this was not
the first time a gaming software provider has encountered payment problems
with the operators of Las Vegas Casino, inc.
It is the opinion of Internet Stock News TM that the charges made by Las
Vegas Casino are malicious and made out of spite because their license has
been cancelled. Regarding the specific claims that the software is faulty,
it seems difficult to believe that Softec's 45 other licensees would
currently have 22 casinos operating successfully if it was flawed as Las
Vegas Casino's claims.
We cannot tell you how to invest, as everyone must make their own
decisions. However, we have increased our ownership of Starnet by
purchasing shares on the open market.
Watch for Starnet's Earnings Announcement after the bell this Thursday!
Sincerely,
ISN
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INTERNET STOCK NEWS (ISN)© 1999
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The information presented in this document is not to be construed as an
offer to sell or a solicitation to buy any securities referred to herein.
We encourage our readers to invest carefully and read the information
available at the web sites of the Securities and Exchange Commission
("SEC") at sec.gov and the National Association of Securities
Dealers ("NASD") at nasd.com. Readers can review all public
filings by companies at the SEC's EDGAR page. The NASD has published
information on how to invest carefully at its web site. Internet Stock
News publishes information regarding selected companies involved in the
Internet industry which those interested in the Internet may use as
information relating to their interests or investments. Many companies
featured in Internet Stock News are clients of IP Equity, Inc., the owner
of Internet Stock News, which receives compensation for assistance in
handling public relations and shareholder relations. Comments in Internet
Stock News are the observations of Internet Stock News and contain sincere
opinions on values and opportunities. They are not intended to be
recommendations to buy, hold, or sell securities. Most information in our
media is derived from the subject companies, without independent
verification by IP Equity as to accuracy and completeness. Some of the
subject companies are clients compensating IP Equity for various services
it provides. Internet Stock News endeavors to research the industry and
obtain independent views in preparing its publications, but there is no
assurance of accuracy. IP Equity does not recommend, warrant or guaranty
the success of any action taken in reliance on statements made in Internet
Stock News. Investments in Internet companies are generally deemed to be
highly speculative and to involve substantial risk, making it appropriate
for readers to consult with professional investment advisors and to make
independent investigations before acting on information published by
Internet Stock News. The Internet industry is changing with great speed,
making it appropriate to update information frequently, which Internet
Stock News cannot undertake to assure. Internet Stock News owners,
employees, writers, their families and associates may have investments in
companies featured in Internet Stock News and may elect to sell these
investments or buy additional investments in these companies at any time.
The following companies featured in Internet Stock News have compensated IP
Equity, Inc. for public relations and shareholder relations services in the
last 12 months with payment in cash, stock, and options which, at the time
of engagement was not valued at more than six hundred thousand dollars:
billserv.com, Inc., Circle Group Internet, Inc., Information Highway, Inc.,
Internet Ventures, Inc., VillageFax.com, Inc., mPhase Technologies, Inc.,
Starnet Communications International, Inc. and Topclick International, Inc.
In addition, IP Equity, the publisher of this newsletter and its officers,
employees, and consultants are believed to own (through share purchases on
the open market or via private placement or direct public offerings) no
more than 15,500 shares of CMGI, Inc., 6000 shares of At Home, Inc., 24,000
shares of Amazon.com, Inc, 1000 shares of Ebay, Inc., Inc. 6200 shares of
Internet Ventures, Inc., 20,000 shares of FreeRealTime.com, Inc. , 100,000
shares of Starnet Communications, Inc., and 2400 shares of SportsLine USA,
Inc. Permission to use, copy and distribute the materials contained in
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Internet investments. Have a great weekend! |
