TheStreet.com on BFLY/WWWFX connection and message boards. Another great article from TheStreet.com just went online:
Bluefly Soars After Net
Fund Nods
By George Mannes
Staff Reporter
1/21/99 9:42 AM ET
Can Wall Street analysts move Internet stocks?
You betcha. Look no further than CIBC
Oppenheimer analyst Henry Blodget, whose
bullish price target in December for Amazon.com
(AMZN:Nasdaq) lit a fire under the stock and whose
cautious comments Wednesday foreshadowed a
drop in the company's shares.
But now it appears that even innocuous
commentary from a mutual-fund manager can push
a Net stock up 79% over three days -- as long as
that commentary is amplified on Internet chat
boards.
The fund manager in question is Ryan Jacob,
portfolio manager of The Internet Fund, the very
same one that was dubbed the No. 1-performing
mutual fund in America in 1998, according to
Lipper, with a return of 196%.
Last week, in the latest edition of monthly
comments he posts on the Internet Fund's Web
site, Jacob pointed out that Bluefly
(BFLY:Nasdaq), a retailer of discounted clothing on
the Web, was the only newcomer in his list of top
25 holdings. Jacobs publishes this list monthly
without disclosing his exact stake in the
companies. "By aligning with various portals,
including Yahoo! (YHOO:Nasdaq), Lycos
(LCOS:Nasdaq) and @Home (ATHM:Nasdaq),
Bluefly has staked its claim as a leader in the
Web's 'outlet' store category," Jacob wrote.
"Because it has a limited operating track record,
Bluefly has not yet been accorded a market value
commensurate with its vast business opportunity."
The letter, dated Jan. 12, was posted on the site
early Thursday morning, Jan. 14, Jacob said.
Later that day, the news was on the boards:
"Netconductor" posted the news of the Internet
Fund's acquisition on Silicon Investor at 1:23
p.m., and "oexmax" posted the full text of Jacob's
comments on the Yahoo Finance board after the
market's close. Since then, nearly 300 comments
have been posted on the Bluefly thread on Yahoo,
with several citing Jacob's holdings and comments.
"Important! BFLY is newest fund holding ... read ..."
was the heading of what "chowda1" posted Friday
morning.
Bluefly rose from a close of 9 3/4 last Wednesday
to a high of 17 7/16 on Tuesday, though it fell 2 3/16
to close at 15 1/4 Wednesday.
Jacob says it's "possible" that his disclosures
moved the stock: "Up until now, I guess our
manager's comment didn't get much notice. I think
it's presumptuous of me to think that our manager's
comments could have that kind of effect, although in
this market, bulletin-board comments have been
known to drive stock prices."
"I'm totally convinced Bluefly's skyrocketing price is
related to the Internet fund," says George Nichols,
identifying himself as the "Netconductor" who
posted on Silicon Investor. "I think everyone is
looking up to [Jacob] as the next Internet stock
guru." The 22-year-old Nichols, who works as an
accountant for an Atlanta TV station, says he
posted the same information on the Motley Fool
and the Yahoo Finance board. He has an
investment in the Internet Fund but not in Bluefly
itself, he says.
Jonathan Morris, executive vice president of Bluefly,
says the company doesn't comment on stock
movement, though he said he'd heard of Jacob's
disclosure that the company was one of the fund's
top holdings. "I have no idea of what effect, if any,
that has had," he said.
Jacob points out that his fund, with assets of $70
million, has received a tremendous amount of
attention in the past two or three weeks since its
Lipper ranking became publicized. He also says
that Bluefly's relatively small market capitalization
of $41.6 million, along with the scant analyst
coverage of the stock, creates a situation in which
disclosures like his could move the stock. "It's
tough for me to really say," he says. "There's no
way of really knowing."
Bluefly, which changed its name from Pivot Rules
and launched its Web site last year, is still below
its 52-week high of 24 1/2, which it hit the day it
said it was launching a store in Yahoo!'s shopping
area.
"Anything can be a catalyst for these stocks," says
Brian Miller, an equity analyst at Invesco. "It
doesn't take much."
tulipmaniac@netconductor.com netconductor.com |
