Here you are Mr.D:
- Abraham - by the way, check out my new and improved profile.
Dow Jones Newswires -- June 9, 1998
Digitcom Finds Loyal Fans On Internet Message
Boards
By CARRIE LEE
Dow Jones Newswires
The Wall Street Journal Interactive Edition
NEW YORK (Dow Jones)--Lots of companies attract a fanatic following on on-line message
boards. Digitcom Corp. (DGIV) is taking that a step further: It has created something akin to a
fan club, and its stock is responding to the fervor.
The tiny company, which is developing an Internet telephony business, is making unusual
efforts to reach out to on-line investors. A Digitcom executive recently fielded questions in an
Internet "chat" session suggested and arranged by an on-line fan. Executives regularly keep
track of the chatter on on-line message boards, and the company has launched an e-mail
newsletter.
Digitcom has good reason to cater to on-line investors. The Santa Monica, Calif., company's
stock jumped as high as 8 last month from just 30 cents in February, when the stock first
showed up on Internet message boards. Digitcom has slipped from its high, but the stock was
still quoted at 6 5/32 Monday on the OTC Bulletin Board service.
Nearly 20,000 postings have been made since February to four message boards that are
dedicated to the stock on the Silicon Investor Web site (www.techstocks.com). Postings have
proliferated on the Yahoo! Web site (quote.yahoo.com) as well, where Digitcom discussions
have appeared on about two dozen message boards that are dedicated to other companies.
Some on-line fans of Digitcom on the Silicon Investor site have taken to calling themselves
"Rocketeers," a reference to the heights they expect the stock to reach.
"Some people would think that we are behind this hype, but we have not initiated contact with
any of these people," says Jimmy Chin, chief executive of Digitcom. "They have called us and
we have answered them."
Digitcom has used some nontraditional methods to reply. Roger Templeton, vice president of
communications, last month fielded questions from investors in an Internet chat that was put
together by one of the most active participants in the Digitcom message boards. The on-line
investor had planned to informally moderate the event, but things became too chaotic for that
when about 130 people crowded into the session.
In an on-line chat, a group of users communicate via computer in real-time. Users type a
message or question on their computer keyboard and it is displayed almost instantly on the
computer screens of everyone in the group. If not moderated, a chat session among a large
number of people can quickly deteriorate into confusion as scores of participants post
messages simultaneously.
The Digitcom chat session was hosted by Delphi Internet Services (www.delphi.com), a
Web-based service featuring everything from serious business discussions to teen and sex
chat.
Digitcom's e-mail newsletter was an offshoot of the chat session, created as another way to
communicate with on-line investors. Templeton, vice president of communications, says
employees of Digitcom don't participant directly in on-line message boards, but he says he and
Chief Executive Chin monitor the chatter to keep tabs on investors' concerns.
Chin acknowledges the impact that on-line chatter has had on Digitcom's stock in a message
sent out in the first installment of the company's newsletter. "I know that Digitcom's involved
stockholders have helped insulate us from some of the ups and downs that many bulletin board
companies endure," he wrote.
But despite the loyalty of on-line investors, analysts remain cautious about Digitcom's
prospects. For all of its efforts to communicate with the Internet crowd, the company has
released little financial information. Digitcom has posted only a handful of financial data for
1997, and it hasn't released any earnings numbers since then. A spokesman says updated
information will be released within the next several days.
Because its stock trades only in the over-the-counter market, the company doesn't have to meet
the rigorous requirements to report financial information that it would face if its stock traded on
one of the major exchanges or the Nasdaq Stock Market. No analysts on Wall Street formally
cover the company. Digitcom says it is preparing an application to list its stock on Nasdaq's
SmallCap market.
"It's highly speculative," says Steve Harmon, an analyst at Internet Stock Report, an on-line
publication of Mecklermedia. "[On-line investors] get behind something. They talk it up. They
are willing to believe in it. I'm not a believer. I haven't seen enough to make a decision."
The company says it posted a profit of $292,585, or 2 cents a share, on revenue of $777,195
in 1997. It attributed its profit to sales of voice mail products, a business it has run since the
company was formed in 1986. It hasn't begun any commercial operations in the Internet
telephony arena.
Digitcom plans to break into the Internet telephony market through partnerships with telephone
companies in emerging markets in Southeast Asia, the Middle East and Russia, for instance.
Emerging markets like these are particularly anxious to get technical help as they open up their
markets for the first time, says Templeton.
The company also plans to acquire several small long-distance carriers in the U.S. into which
the overseas operations will connect. "We're engaged in several serious negotiations," says
Chin. Once the foreign and U.S. units are established, they will market to consumers in their
respective countries, and Digitcom will act as a holding company.
Templeton says Digitcom plans to use a stock offering or debt issue to finance the U.S. carrier
purchase. "[We're] looking for targets that don't require a great deal of cash up front ... and
are doing in the neighborhood of $15 million to $30 million in revenues per year," says
Templeton. He didn't identify any targets.
Last fall, the company raised $880,000 in a private sale of stock. Digitcom has a total of 18
million shares outstanding, and 6 million of those shares are in the hands of the public. Chin
controls about 10.5 million restricted shares, and an additional 1.5 million are held by other
insiders.
Briefing Book for: DGIV
Return to top of page | Format for printing
Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved. |
