Joe Park Is Undeniably An Internet-Trading Star
November 4, 1998
Heard on the Net
By JOHN R. EMSHWILLER
Staff Reporter of THE WALL STREET JOURNAL
Fans say he can make them money. Detractors say he's scurrilous. But call him what you
will, former burrito merchant Joe Park has undeniably become an Internet stock-trading star.
Hundreds routinely follow his online postings, made using the moniker TokyoMex. His Web
site, Tokyo Joe's Cafe (www.TokyoJoe.com), has become one of the most popular
stock-chat message boards in cyberspace. Investors pay him about $500 a year for private
access to his stock-trading strategies. And a number of small companies have been feeling his
clout.
Earlier this year, Rentech Inc., a small Denver energy and
petrochemical company, received a call from Mr. Park. He said
he and his online followers would be buying a million Rentech
shares, recalls Mark Koenig, who handles investor relations for
the firm. The next day, more than 1.9 million Rentech shares
traded on the Nasdaq Stock Market, about six times its normal
volume. The stock's price leaped nearly 50%, to $1.44 a share.
TokyoMex then called back. "He said, 'You need to put out a
news release to keep the stock going,' " says Mr. Koenig, who
adds that the company rejected that request. Tuesday, Rentech
closed at $1.21875. Mr. Park says he merely wanted Rentech to
explain in a news release why it was such a good company.
Internet Gurus
The rise of Mr. Park illustrates the opportunities and difficulties that have come with the
marriage of the Internet and the securities markets. The 39-year-old New Yorker is part of a
new breed of amateur traders who have been transformed through the communications power
of the Internet into stock-trading gurus, complete with their own followers and the ability to
move small-company stocks with the click of a mouse.
The Internet has been fertile ground for those with some
stock-picking ability -- or at least the ability to make
people think they have it. But it can also resemble an
ethical quagmire, where it's hard to separate truth from
fiction, or manipulation. The U.S. Securities and Exchange
Commission is so concerned about potential
online-investing abuses that it has set up a
cyberspace-surveillance unit to catch illegal activities. Last
week, for example, the SEC charged 44 companies and
individuals with illegally touting small-company stocks on
the Internet.
Mr. Park grew up in Seoul, South Korea, has been a
lawyer in Tokyo, a real-estate investor in Seattle and
owner of Tokyo Joe's Classic Burrito restaurant in
Manhattan. He says he dabbled in stocks for years
through brokerage firms, but then in late 1995 discovered Internet chat boards and a new life.
Some of his early stock picks turned out to be winners, and he began to gather a following.
At Silicon Investor (www.techstocks.com), one of the Internet's most popular stock-chat
operations, more than 1,100 people have "PeopleMarked" TokyoMex so that they will know
when he posts a message. The next most-followed person has about 900. In addition, more
than 30,000 messages have been posted by Mr. Park and others on his Tokyo Joe's Cafe site
since it was opened in March, making it among the 20 most-visited locations of about 2,500
on Silicon Investor, says Jill McKinney, administrator of the stock-chat service.
Societe Anonym
Mr. Park says his Web site for paying subscribers, called Societe Anonym, has about 220
members, from as far away as Indonesia and Saudi Arabia. (Earlier this year it had 450, but
Mr. Park doubled the membership fee.) Subscribers get access to his nonpublic messages. He
says he chose the group's name because, for the most part, "I don't know these people."
And vice versa. A recent e-mail message to Mr. Park from a Societe member in Sweden said,
"I don't even know your real name and I am sending you money, such is the craziness that we
have come to."
But there is method in this madness. According to an early mission statement, Societe
Anonym was created to provide group buying power for "blitzkrieg, quick in and quick out"
stock trading. "We only pick stocks that are sensitive to volume and momentum. It is easy to
trigger the momentum," this document says.
Dale Weaver, a civil-engineering technician and Societe Anonym member from Fredericksburg,
Va., says that for much of this year he has been averaging about $2,000 a week in profits with
the help of Mr. Park's tips. "TokyoMex has to be the ultimate 'day trader,' " or short-term
stock speculator, Mr. Weaver says.
'Pumping and Dumping'
But Gary Swancey, a former heating contractor and Internet stock player from Stockbridge,
Ga., says Mr. Park and others have used their followers like "sheep" to push up the price of a
small-company stock, then quickly sell for a profit, a practice called "pumping and dumping."
Mr. Park readily acknowledges "some conflicts of interest where I was pushing stocks I
owned" and then "reaped most of the benefits" when followers bought in. "That wasn't fair,"
he concedes. Now, he adds, he generally tells Societe Anonym about his buying plans at the
time he executes the transactions. He also says he holds stocks longer term and focuses more
on larger-company stocks.
In early April, Mr. Park recommended the stock of 800 Travel Systems Inc., a Tampa, Fla.,
travel agency. The stock's price rose within the next several days to $10 from about $3 on
Nasdaq.
In one Internet message, Mr. Park wrote: "I spoke with CEO,,board meeting on Wed,,,will go
full web...imagine what it will do to the stock..." This was a reference to 800 Travel shifting
its sales operations fully over to the Internet. For much of this year, companies involved in
Internet commerce have been hot stock plays.
Mark Mastrini, 800 Travel's president and chief executive, acknowledges having talked to Mr.
Park but says he never spoke of any plans to sell only over the Internet. Mr. Park says the
conversation occurred.
A Field Trip
In June, a little Boca Raton, Fla., cigar, food and skin-care company called DCGR
International Holdings Inc. paid Mr. Park's expenses to come to its headquarters in hopes he
would put out a favorable word about the firm.
He did, and the stock rose on heavy volume but then fell back. DCGR president Don Platten
says he now assumes Mr. Park is a "hype and dump guy" and regrets having courted him.
Mr. Park says he sold his DCGR shares after roughly doubling his money. Eventually, he
adds, "penny stocks always go down. That's why they are pennies."
Each trading day, Mr. Park sits in his Manhattan apartment in front of two computers loaded
with sophisticated stock-tracking software. Business news blares on a TV. While puffing on
Marlboros and sipping orange juice, Mr. Park receives and sends dozens of e-mail messages a
day and executes orders electronically for his own account.
He can be alternately tender and testy. When a Societe member died recently, Mr. Park sent
out a eulogy wishing "him a bon voyage." But at another moment, he complains to members
about having "to hold every one's ... hands all day."
During the recent market turmoil, Mr. Park has, like almost everyone else, been trying to hold
his head above water. He says the downturn has trimmed his personal trading profits this
year to under $500,000 from a high of more than $600,000. He adds that he is still far above
the $22,000 he started with in January. |
