Stockgroup launches new financial Web site amid much hoopla
Tue 5 Oct 99
Also Global Investment.com Financial Inc (GIV)
NEW WEB SITE A GROUNDBREAKER FOR SMALL INVESTORS, SAYS MARCUS NEW
by Stockwatch Business Reporter
OTC Bulletin Board listing Stockgroup.com Holdings Inc. launched its new
Web site, Smallcapcenter.com, on Tuesday amid much corporate high-fiving at
its downtown Vancouver offices, and with the help of a $2.7-million (U.S.)
advertising campaign.
Chairman Marcus New -- an active hand at corporate promotions -- told
investors and potential Web site members: "For the first time, investors
will be able to access hard-to-find information on small- and micro-cap
public companies. The launch of Smallcapcenter.com is a culmination of
extensive research into the needs of small- and micro-cap investors." There
was a press conference and, of course, a "Webcast" in which investors and
journalists were invited to E-mail in their questions to Mr. New.
The company has good reason to feel the need to get noticed. It is one of
at least eight Vancouver-based listed financial-information sites vying for
the public's attention. Stockgroup has been paired, willingly or
unwillingly, through mutual investments by media giant Hollinger Inc.,
which now owns part of both Mr. New's company and Vancouver-based
StockHouse Media Corp.
In September, both companies received significant injections of funds from
companies owned by the London-based press baron Conrad Black. On Sept. 20,
Southam Inc. bought 200,000 shares of Stockgroup.com for $6 a share for a
total of $1.2-million. That represents a 2.5-per-cent interest in the
bulletin board company.
On Sept. 28, Hollinger bought 7 per cent of StockHouse for what was
described in the Globe and Mail newspaper as a total investment of less
than $5-million (Canadian). As part of the deal, StockHouse gets
$1.5-million in advertising in Hollinger's 296 daily and non-daily
newspapers and other publications. As part of the deal, David Radler,
Hollinger's president and chief operating officer, joined StockHouse's
advisory board.
Judging by the full-page advertisements in Tuesday's National Post and The
Vancouver Sun to launch Stockgroup's Web site, Hollinger is recovering a
good part of its investment in advertising. The Post and The Sun are owned
by Mr. Black.
StockHouse, which for almost two years has been expecting to to make an
initial public offering in the near future, first tested the investment
waters in April, 1999, when it agreed to acquire a minority interest in
Charles Desjardin's Victory Ventures Inc., a Vancouver Stock Exchange
company. The alliance amounted to a reverse takeover by StockHouse, and
Victory Ventures' name was changed to Global Investment.com Financial Inc.
in July.
The businesses of Stockgroup's Mr. New and his counterpart at StockHouse,
president and founder Jeff Berwick, have some similarities. Both companies
were founded in 1995, with corporate promotion for public companies a large
part of their business. One of Mr. New's promotions that was still going
strong as recently as July, 1998, was Golden Maritime Resources Ltd. Mr.
New described Golden Maritime at that time as "striving to become Central
America's largest integrated fishing operation." It closed on Tuesday at 30
cents.
Mr. Berwick, who was compared favourably on local television news station
BCTV to Microsoft chairman Bill Gates, boasted to Sydney-based The
Australian that he started his company by running up a $100,000 bill on his
credit card. Mr. Berwick also claimed in 1998 that his Web site receives
150 million hits per month, and in January, 1999, he said visits to
StockHouse were growing at 15 per cent each month. StockHouse became a
sponsor of the BCTV NewsHour.
StockHouse is still in the promotion business. Earlier this year, Chapleau
Resources entered into a deal with StockHouse worth $120,000 (Canadian) for
a year's efforts in getting Chapleau's message to the world through
customer service and investor relations.
Smallcapcenter's editor is Don Whitely, although the company seems to not
advertise this. Mr. Whitely is a veteran Vancouver Sun business reporter,
having covered the forest industry in the 1980s. He left the Sun and worked
in forest-industry public relations for several years before joining
Stockgroup. Hollinger eventually bought out Southam Inc., which included
The Sun.
A brief site visit today started with the obvious request, a quote for two
Canadian companies that produced a quite satisfactory result. The Royal
Bank, symbol RY on all Canadian exchanges as well as on the New York Stock
Exchange, came up with a closing price of $41.375 and volume of 18,300
shares. Obviously the default is to the New York exchange, rather than to
the Toronto exchange, which is where the stock trades best. If this is a
disappointment for Canadian investors, there is a solution: Insert an
exchange prefix with a dot before the symbol, and the price of the stock on
that exchange will appear. Using our Royal Bank example on the TSE,
Stockgroup came up with a $61 close on volume of 1,776,600 shares. A search
for the price of a Stockgroup competitor, stox.com, listed on the VSE,
yielded a closing price of $3.46 on 11,000 shares. All quotes are delayed
by either 15 or 20 minutes; there is neither realtime nor market depth
available.
StockGroup also provides a user with some fundamental information, along
with the quote. Without making a new request, the user sees the company's
address, phone and fax numbers, some officers (in the case of stox.com) or
all (in the case of the Royal Bank) - but not directors. Historical charts
are available, but for intraday charts an investor will have to go
elsewhere. A several sentence summary of the company's business, which
might be useful for inexperienced investors, also pops up. Of interest to
some investors is a list of institutional investors.
News and how it is covered represents probably the greatest difference
between the two Web sites. The emphasis at StockHouse is on wire feeds of
financial news, much of it U.S.-based, from such sources as CNN, Bloomberg,
The Wall Street Journal, and CNET. Once a headline is clicked, the story
appears and other links are available concerning that stock and others in
its group; a link to a discussion forum is also available. StockHouse also
has something called Stock Watch, in which a "hot" stock and a "cold" stock
are given a quick treatment as to why each is doing well or poorly, along
with charts and links.
At Stockgroup's Smallcapcenter.com, news is what they appear to most proud
of. Stockgroup promises to deliver a minimum of 15 original stories a day,
growing to 35 in a few months. The top story on launch day was an item on
last month's Hurricane Floyd which, reports Joann McKinlay, caused property
damage totalling $1-billion and uncalculated costs in flooding on the U.S.
East Coast. Now feeling the rain is the insurance industry, she says,
citing the fortunes of three Nasdaq property and casualty firms listed on
Nasdaq -- Harleysville Group, Erie Indemnity, and The Midland Company.
Smallcapcenter brings its reporters to the fore, offering pictures of them
along with their byline. Further, by clicking the byline, readers learn
that in the past, Ms. McKinlay reported from Mexico City for the trade
paper Plastics News, among others, including Mexican financial newswire
Finsat. She now works in Stockgroup's Vancouver offices.
Other Stockgroup stories include an item on the oil patch by Richard
Ketchen, a certified general accountant, and one on the U.S. trucking
industry by Adam Peeler who, readers are informed, is a diehard hockey fan.
StockHouse also has original editorial, mainly in the form of
interviews with company executives. On Tuesday, two interviews were
featured; one was with Geof Wheelwright, a Southam contributor, who is also
the chief operating officer of Investment.com, the other with Tom
Kordyback, chief financial officer of Vancouver-based office printing
equipment supplier Creo Products. The interview was by Hilary Chiba, but we
are not told anything about her. An earlier interview that attracted much
attention was the February, 1999, chat with Don Wolanchuk, who was
described as Timer Digest's 13-time winner of "Timer of the Year." Mr.
Wolanchuk made news by saying he thought the Vancouver Stock Exchange was
on the brink of an unprecedented boom. Mr. Wolanchuk has his own his 1-800
number and an $8,000 per year hotline.
While Stockgroup's forte is its original reporting, StockHouse's may be its
discussion forums, under the header BullBoards. Certainly, the site gained
its early reputation by having some of the liveliest forums around which
were often compared by users with Yahoo! and Silicon Investor's sites. On
July 1, 1998, however, practically an entire discussion forum got up and
left StockHouse's Crystallex site, apparently over a dispute about the
company's failure to cancel the posting privileges of one particular
non-promoting poster. The forum reformed at Ragingbull.com.
Stockgroup's Smallcapcenter also has discussion forums, under the banner
Smalltalk. For now, however, StockHouse's BullBoard site is clearly more
developed and popular. Time will tell whether Smallcapcenter's will develop
into a feature that pulls in eyeballs for the site.
Today on the much maligned OTC Bulletin Board, Stockgroup closed up 1/8 at
$3-3/8 on 21,300 shares. This is up from an intraday low of $2.50 last
week. In March, 1999, the stock traded over $10, so it can never be said
that Hollinger's David Radler bought at the top.
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