yes recent trading volume at 52 week LOWS is always relevant. Please tell the World why SKUPFER is a good investment and why people should invest in this company. Please debate the following and tell us if it is true or was this reporter a liar? The World is waiting.
LV dot-com hit with layoffs, uncertainty
lvbusinesspress.com
By Kevin Ferguson
Las Vegas Business Press
June 12, 2000
Another round of layoffs has hit Las Vegas-based Preference Technologies, and more woes may be in store for the dot-com based on a recent financial report and fears that the company is having trouble obtaining financing to stay afloat.
Questionable marketing techniques by the company under a different name and alleged ties to a man who was convicted of wire fraud also have surfaced.
Preference Technologies, formerly known as Stockup.com, laid off 15 percent of its approximately 200 employees May 31. Chief Executive Michael Calderone said the layoffs were in all departments but mainly in technological development.
Calderone said that since the company's recent release of its first product, a customizable news and information site called the Global Information Gateway, it is now focusing on sales efforts.
Several employees, who have since been laid off, have said that the company is "unfocused" and promoting a product that "doesn't work."
"It's difficult to download and it eats up a lot of memory," said one former employee who did not want to be identified. "Their schtick was that it can customize the information for you, but a lot of companies are doing that now."
In response, Calderone said other dot-coms have had similar difficulties.
"Find me a software product that doesn't have problems," he said. "Any software product that comes out at first is going to have bugs. We are experimenting with a new area. The product is out and people are excited about it."
The sales of its initial product have generated about $30,000 in the past three weeks, according to a memo Calderone e-mailed to the company's remaining employees.
The purpose of the e-mail was to calm the nerves of staffers after the layoffs. A copy of it was obtained by the Business Press.
"It appears as if the development window given by funding sources just six months ago is now disappearing," Calderone wrote. "A company whose business plan cannot or will not show a profit within a year or more is being disregarded as a good investment opportunity by the financial community. What the investment community wants is lean, mean running machines.... Because of this situation and because we must be able to prove that not only can we generate revenues but simultaneously control our costs, we are forced to have an approximate 15 percent reduction in our work force."
Preference Technologies' own financial statement shows that it is in dire need of cash. The company spent more than $1.4 million on research and development for its proprietary technology from when it was founded in February 1999 to Dec. 31, 1999. The company incurred a net loss of $8.3 million and had a negative cash flow of just under $5 million.
The firm's primary revenue stream "will be achieved from strategic alliances and subscriber fees," according to the statement. Revenues to be generated would fund company operations, including funding for ongoing technological advances, it stated.
The company's stock was placed on the Over-the-Counter Bulletin Board exchange in February 1999, but the firm has never paid a cash dividend on its common stock. The financial statement also says the company doesn't anticipate paying any dividends for another 12 months (ending Dec. 31, 2000).
"We've never bragged about our revenues or profits because we know it takes a long time in this business. We're in it for the long haul," Calderone said.
The company is trying to find $10 million to keep going, but it is having trouble, a source said.
The company has historically financed its operations to date through the sale of its common stock. From its inception through Dec. 31, it issued more than 26 million shares of common stock, raising $2.9 million, according to the statement.
During the company's product launch news conference in February, Preference Technologies was praised by local business leaders and others, including Nevada Development Authority President Somer Hollingsworth, Las Vegas Mayor Oscar Goodman and Nevada Lt. Gov. Lorraine Hunt.
The three have been vocal about creating a high-tech hub in Las Vegas for the past year, but bringing and nurturing thriving dot-coms in the "Silicon Oasis" is proving to be easier said than done. PurchasePro.com, the largest desert dot-com, also slashed 10 percent of its employment recently. PurchasePro executives have said the cuts are unrelated to the recent loss in value of its Nasdaq stock.
A tangled web
Calderone's Las Vegas-based financial public relations firm, Marketing Direct Concepts, merged with Courtleigh Capital in February 1999 to create Stockup.com.
The roots of Courtleigh Capital, which also went through a series of name changes, was built by Edward Williamson, who once pleaded guilty to wire fraud after attempting to bribe undercover FBI agents posing as stock brokers in an attempt to persuade them to peddle selected stocks.
Williamson incorporated his company as ANCR Inc. in Colorado in 1985. Two years later, he changed the name to CEA Labs Inc. In 1995, the company was reincorporated in Kansas, followed by another name change two years later to Courtleigh Capital.
Calderone claims he has no relationship with Williamson, and that when MDC merged with Courtleigh Capital, it was the "shell" of a dormant company. Taking that route, he said, was a speedy way to go public because Courtleigh had already been trading on the Over-the-Counter exchange.
Williamson told the Business Press he was involved with Calderone about 18 months ago when he helped Courtleigh Capital merge with MDC.
But even before that, Calderone found himself in the middle of a questionable stock promotion scheme while running Marketing Direct Concepts. The Wall Street Journal mentioned Calderone's financial public relations firm in a Sept. 8, 1998 story on stock scams.
The story detailed how shares in Oshman's Sporting Goods jumped 17 percent in one day in July 1998 from a pair of "bullish research reports" and "the buzz about the company on the Net."
"But what wasn't immediately apparent," the article continued, "was that one of the analyst reports was paid for by Marketing Direct Concepts, a Las Vegas firm with a stake in Oshman's valued at more than $100,000 at the time.
"The firm paid a public relations wire service to distribute both the analyst reports.... Oshman's says it has no affiliation with Marketing Direct Concepts. Calderone... says he doesn't see anything wrong with the arrangement."
When the Business Press asked Calderone to comment, he said the MDC relationship was "fully disclosed. We liked the company and took a position in the company because we saw it as an emerging company. There was no conflict of interest."
Before Williamson pleaded guilty to wire fraud, he had launched another stock promotion company called Williamson & Associates. After his arrest in January 1997, he changed the company name to Fifth Avenue Communications based in New York.
A column on the Web site of the cable news channel MSNBC reported that Fifth Avenue later issued a press release saying the business was being sold by its "otherwise unidentified owner" CEA Labs (a company owned by Williamson) to a penny stock outfit called Auburn Equities.
Two years later, Williamson was still listed as the billing contact for Fifth Avenue Communications' Web site and the company continued to issue promotional material, including releases pushing Stockup.com.
MSNBC reported that on May 4, Fifth Avenue issued a Stockup.com news release. Soon after, its stock rose from $3.50 a share to nearly $40.
"The Fifth Avenue Communications Web site has itself recommending Stockup.com for purchase as recently as June 17, (1999)," MSNBC reported. The news release has since been erased from the Web site.
Preference Technologies' Calderone said that he has never met Williamson.
"That's (Williamson's) prerogative if he wants to promote us," he said. "We sent him a letter telling him to disclose that he has no relationship with our company."
Williamson said Fifth Avenue is a financial public relations firm, and companies pay to be posted on its Web site.
"We had them on our site because they were going to hire us, but Stockup.com was taken off the site when they decided to go with another company to promote them," Williamson said.
Stockup.com's stock rose and fell sharply during that time, even though it didn't offer any products for sale until its news conference in February, when it announced it was changing its name to Preference Technologies and released the Global Information Gateway.
During a February interview with the Business Press, Calderone boasted that the company's Web site had been ranked among the top 500 visited sites, according to Media Metrix, an Internet rating service. He said that was because of alliances the company had established with other popular sites that channel Web traffic to Stockup.com. |
