FROM THE WSJ ON PNLK
Here is what they wrote today The truth about prolink
Promotions by ProNetLink
Stir Up Chatter and Its Stock
By JASON ANDERS
THE WALL STREET JOURNAL INTERACTIVE EDITION
On-line message boards are alive with chatter about how a relatively unknown Web-site company, ProNetLink, is going to revolutionize the way the world's companies do business with each other.
In the past month, thousands of messages have been posted about the start-up company and the roller coaster its stock has ridden since ProNetLink's reverse merger with a shell company in August 1997. The stock closed as high as 7 15/32 on the OTC Bulletin Board service on May 13, up from 1 1/16 a month earlier. It has fallen back to 3 9/16 since then, but that still gives the company an indicated value of $134.7 million.
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Its valuation has soared even though ProNetLink has just $379,227 in assets, no earnings and no revenue. The company is less than a year old, has just six employees, and its only product was introduced just last Friday. But the company has used an aggressive promotional campaign to spread the word about its service.
In the past two weeks alone, ProNetLink has issued a dozen press releases about its Web site, the company's only business, which it bills as the "fastest, most profitable way to find, buy or sell products world-wide." It also paid $50,000 to a Web site called Stock Genie (www.stockgenie.com) to tout ProNetLink as the site's "pick of the month" for March.
"This is Bill Gates in his garage launching Microsoft. The potential for this company is exponential."
-- Glenn Zagoren, who handles marketing for ProNetLink
Says Glenn Zagoren, president of Zagoren-Zozzora Inc., the New York firm that ProNetLink hired to handle its marketing: "This is Bill Gates in his garage launching Microsoft. The potential for this company is exponential. This could be the hub of global commerce."
Since its inception, ProNetLink's steady stream of press releases has detailed the company's plans and milestones in the development of its Web site, putting a strong spin on its future prospects.
The Marketing Drive
One of its first press releases, in October 1997, announced that "ProNetLink permits its members to advertise their companies to up to 40 million Internet users daily." The claim about the site's marketing reach, made six months before the Web site was launched, was based merely on an estimate of the total universe of Internet users. In the week ended May 17, the company says, just 8,868 "user sessions" were recorded.
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Separately, a biography released in April of Jean Pierre Collardeau, its president and founder, describes him as a leader in the import-export business, and says that he "has been called upon to give frequent speeches" to trade-related organizations, including the World Trade Center, the Florida Trade Data Center and the U.S. Export Assistance Center, a division of the Commerce Department.
Mr. Collardeau says that the World Trade Center mentioned in the press release refers to the Florida World Trade Center, a regional trade association in Miami, rather than the landmark New York complex. He says all three organizations listed in the press release are closely linked and based in the same building, and that he spoke there a few times, three or four years ago.
Stella Dreyer, chief operating officer of the Florida Trade Data Center, says Mr. Collardeau was never invited by the center to speak. "He may have given some sort of speech at the center, but he certainly didn't give a speech for the center," she says. Similarly, John McCartney, director of the U.S. Export Assistance Center in Miami, says no one in his office has ever heard of Mr. Collardeau.
Joe Aguilera, who arranges speakers for the Florida World Trade Center, was traveling and couldn't be reached for comment.
Another ProNetLink press release, issued on May 8, says its subscribers would get free access to Dow Jones News Service. The release also referred to content from Dow Jones News Focus. "This feature alone makes the ProNetLink dollar-a-day membership fee seem far too low," the release quotes Mr. Collardeau as saying at a press conference. Dow Jones & Co., which publishes the news service as well as The Wall Street Journal Interactive Edition, later the same day issued a release of its own, saying no deal had been struck yet, and that full access to Dow Jones News Service wasn't under consideration. This week, the companies reached a deal regarding News Focus, a far more limited news service.
Mr. Collardeau says he doesn't remember a press conference on the matter. Mr. Zagoren, in an interview, blamed the faulty press release on miscommunication and said last Thursday that he had "jumped the gun by a couple days."
Paying for Publicity
As for ProNetLink's use of the Stock Genie Web site, Mr. Zagoren says he believes that readers of the Internet investing site recognize it as an advertising tool and nothing more. The Stock Genie site, in part, says: "ProNetLink in our opinion will become the largest single source of business information and resources for import/export on the Internet." It doesn't mention the payment it received from ProNetLink until the last few sentences of a 466-word disclaimer.
A spokesman for Stock Genie couldn't be reached for comment. A person answering the phone at Adshop, a New York firm that maintains the Stock Genie site, declined to comment.
Mr. Zagoren says a "significant" part of his compensation from ProNetLink will come in the way of stock options. He says that in March 1999 -- one year after his contract with ProNetLink began -- he will be able to buy up to 500,000 ProNetLink shares for $1 each, and sell them at any time. "It's the incentive factor. They are saying, 'We're at $1 today, where can you take us? If you do a good job, you deserve to make money on that,'" he says.
Others could make a tremendous profit from ProNetLink stock, if it remains anywhere near its current price. Mr. Collardeau purchased four million shares of the company in August 1997 for $400, or one-hundredth of a cent each. Other members of his family hold nine million shares, purchased at the same price. Even after the stock's recent slide, at the close of trading Wednesday, Mr. Collardeau's holdings were worth $14.3 million.
Mr. Collardeau can begin selling shares incrementally on Aug. 1. He says there are restrictions on how many shares he may sell in a given time, but says he doesn't know what those restrictions are.
The OTC Bulletin Board service, where ProNetLink's shares are traded, is a quotation service run by the National Association of Securities Dealers. Stocks traded there aren't subject to same regulations as are shares traded on the Nasdaq Stock Market, for instance, or the U.S. major exchanges.
Active On-Line Chatter
Meanwhile, on-line message boards are buzzing, and an overwhelming majority of the comments are positive. More than 5,600 messages have been posted in a ProNetLink forum on the Silicon Investor Web site (www.techstocks.com) since April 21 -- more than four times as much traffic as a Microsoft forum received during the same time. Mr. Zagoren says he has posted ProNetLink's press releases on the site, and joined on-line discussions from time to time to "correct inaccurate or misleading information."
Despite ProNetLink's marketing efforts, Mr. Zagoren attributes the popularity of ProNetLink's shares to the message-board chatter. "The worst thing you can do is overhype a product and then not deliver," he says.
Mr. Zagoren said the company expects most of its revenue to come from subscriptions to the ProNetLink Web site, which cost $360 a year. The company predicts it will have 40,000 subscribers in a year.
How the Site Works
At the site, subscribers can tap into a database of global trading firms, and import and export regulations. They can use the site to send messages to potential trading partners and to iron out contracts for the purchase or sale of goods. The site uses a vast database of companies licensed from Dun & Bradstreet. ProNetLink envisions subscribers around the globe using the service to exchange everything from rice to shellfish.
Mr. Collardeau sees the following as one possible scenario: A broker in New York wants to move rice from a supplier in Thailand to a customer in Nigeria. He logs in to ProNetLink, fills out a form detailing his needs, and lists the price he's willing to pay. Instantly, ProNetLink sends out a quote request by fax or e-mail to the companies in its massive database that can do the job (regardless of whether or not they are ProNetLink subscribers). Within an hour, the New York broker gets responses.
At that point, ProNetLink will help the two sides fill out the necessary paperwork, find suitable transportation for the product and arrange financing. The company says it has arrangements with a number of banks, but declines to name them.
But analysts caution trading with foreign companies can be tricky business.
"There are a lot of complexities involved, a lot of nuances," says Harry Baumes, senior vice president of agricultural services at the WEFA Group, a firm that researches international trade. "Foreign companies and governments want to deal with people who they know ... who can take care of the behind-the-scenes things with minimal hassle."
Those behind-the-scenes things include everything from what type of boat the cargo will be shipped on to exactly where, when, and by whom it will be unloaded.
Mr. Baumes points out that moving rice from Thailand to Nigeria may be relatively easy, but he says moving rice from China or another more restrictive country usually takes experienced traders with relationships in those areas. And pointing to China, where import and export rules can change frequently, he questions how feasible it is to maintain a database on regulations.
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Write to Jason Anders at jason.anders@news.wsj.com.
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