Dow Jones Newswires -- May 18, 1998
Internet Chatter Accompanies Rise And Fall of Pro
Net Link
By JOHANNA BENNETT
Dow Jones Newswires
NEW YORK -- It's been a topsy-turvy month for Pro Net Link Corp. (PNLK).
The on-line corporate networking company's stock price has surged and
plunged twice in the last month. The only brokerage firm covering the OTC
bulletin board stock has advised investors to sell their shares. Trading on
Monday saw an early-morning surge up to $6 a share, only to fall back to a
slight gain by late afternoon.
All the while, Internet message-board participants continue a surprisingly
supportive stance toward the shares - despite some serious dips - by posting
more than 7,000 messages in less than a month on Silicon Investor and Yahoo
Finance.
"The excitement for the stock comes from all these posts and the press
releases the company is putting out," said Sandy Greenberg, president of
Chatfield Dean & Co., the sole brokerage firm covering the stock.
Shares of Pro Net Link recently were selling for $4.93 a share, up 6%, following
a price plunge late last week and Friday's kickoff of the company's new World
Wide Web site.
"Any doubts about this company were quickly put to rest over the weekend,"
wrote one Silicon Investor participant. "If you did not take advantage of
Friday's sell-off, SHAME ON YOU."
Monday's action appears to be just the latest turn in a three-week-long
roller-coaster ride during which the stock shot up from under $1 a share to a
high of 7 15/32 last week. But after Chatfield Dean & Co. issued its sell
recommendation, the stock fell to its close Friday of $4.65 a share.
"There is absolutely no reason in our mind (for the stock to be down)," said
company spokesman Glen Zagaoren. "Everything Pro Net Link set out to do
for our launch (of a new Web site) has been completed on time... The only
assumption I have is that there are people out there whose intention to drive
stock down for their own gain."
Not everyone agreed.
A Chatfield Dean research report issued last week contained the sell
recommendation - a rarity in financial circles - for the start-up company,
arguing that the company has no history of revenues and the shares are
overvalued. And accusations have arisen from some circles that Pro Net Link
was being hyped on Internet chat rooms.
Last week, when the Pro Net Link hit an intraday high of $8 a share, the
company's market cap was $300 million. By Monday afternoon, the valuation
hovered at $176 million.
The report also says the company lacks enough capital to market its Web site,
with $485,314 cash on hand and a credit line of $500,000, not to mention
liabilities of more than $399,000 and net losses of $364,000 for the nine-month
period ended May 7.
"I am not taking issue with the fact they want to open an Internet business,"
said Greenberg, whose company said it wasn't short on the stock. "What we
are taking issue with is the valuation being placed on the company."
A Pro Net Link spokesman, as well as participants in message boards on
Yahoo Finance and Silicon Investor, have taken issue with Greenberg's
statements, questioning the motivation behind the rating.
Allegations of stock hype are "Hooey," said company spokesman Glen
Zagaoren.
"I am not saying there aren't people who hype a stock... What I am saying is
that my company and Pro Net Link have been very active in making sure the
information on that site is very accurate," Zagaoren said.
A demo Web site has been averaging 10,000 user sessions a month, good
news considering the company estimates signing up about 1,000 customers in
the first month, Zagaoren said. But by the end of the first year, subscriptions will
number 35,000 to 40,000 and account for $12 million in gross revenues, he
added.
Meanwhile, Company President Russell Van de Casteele has put $100,000 into
the company as of May 11, Zagaoren said.
-Johanna Bennett; 201-938-5670
Briefing Book for: PNLK
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