STEVE HARMON PLANS OWN INTERNET FUND. SMARTMONEY.COM ARTICLE BY DANNY HAKIM. Good luck Steve, keep us posted on your e-harmon.com list. - Netconductor.com
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SmartMoney.com: Funds Today - July 30, 1999
Online Guru Plans His Own Internet Fund
THE FUR IS really flying in the world of Internet funds. The first Internet index
fund will make its debut on Friday -- but the stock picker who was the driving
force behind the index has left, and now plans to launch a rival fund.
Internet stock analyst Steve Harmon made his name as the chief stock picker of
Internet.com?s (INTM1) ISDEX Internet index, one of the first Internet stock
indexes. The popular analyst?s forecasts were featured on Yahoo! (YHOO2)
and in postings to a well-traveled Silicon Investor message board. Last year,
Harmon launched an online write-in campaign to convince a fund family to take
on an ISDEX fund. And he was finally about to get his wish: Guinness Flight3
Internet.com Index Fund will be launched Friday as the first Internet index fund.
But last week, Harmon resigned from Internet.com to start his own Internet
investment company, "e-harmon4." Now it appears he is keen to compete
against his old firm and the fund he dreamed of starting. Harmon says he
tentatively plans to launch a competing fund, with the working title of
"e-harmon.com Internet growth fund," and he hopes to file with the Securities
and Exchange Commission within a few weeks.
The competition between Harmon and his former employer doesn?t appear to
end there. Since Harmon?s departure, neither side can agree on what Harmon
did for the ISDEX, which went up 187% last year. Internet.com CEO Alan
Meckler says the index predated Harmon?s arrival at the company, then
Mecklermedia, in 1996. "The ISDEX was already created several months
before he joined us," says Meckler, while praising Harmon's contribution. "Steve
made it a more popular index and I won't take that away from him. I have the
greatest admiration for Steve."
But Harmon says he pitched the idea for an Internet index to Meckler while he
was working at another company, and he was the one who created and ran the
index. "I?m disappointed that Alan is in the business of rewriting history," he says.
Meckler also says that Harmon?s departure is "irrelevant" to the future of the
index and the index fund, since the vehicles are not actively managed and
Harmon was one member of a four-person team. Harmon claims he was the
prime mover behind the composition of the index and critical to its success.
The brouhaha follows a somewhat similar spat at the actively managed Internet
Fund (WWWFX5), the best-performing mutual fund of 1998, with a gain of
196% last year. Earlier this month, the fund?s star manager, Ryan Jacob6,
resigned. Executives at the fund have since downplayed Jacob?s role and said he
was one of a team of stock pickers. Jacob contends he ran the fund alone for
much of his tenure. "Give Ryan Jacob his due," says Harmon sympathetically.
Jacob also plans to launch his own competing Internet fund, Jacob Internet, and
has already filed with the SEC. Both Harmon and Jacob have launched
preliminary Web sites that invite interested parties to email for more information.
Harmon says his new firm will invest in both privately held and public Internet
companies through various investment vehicles. Meanwhile, Internet.com
announced today in a press release that it replaced Harmon with Tom Taulli, a
former Silicon Investor analyst.
So what?s with all the squabbling? The world of Internet mutual funds is getting
quite cluttered. A year ago, there were three Internet-focused funds. After the
ISDEX fund launches, there will be nine. Many more are on the drawing board,
from established companies like Stein Roe to offerings like StockJungle.com
Pure Play Internet, one of four planned offerings from a new online fund family.
And as everybody knows, crowding doesn?t always bring out the best behavior.
-- By Danny Hakim7 |
