Don't be a clueless investor...read this it may sound familiar!!!
MOUNT VERNON, N.Y. (CBS.MW) -- For the second time in a week, shares of Interiors Inc. shot up at the opening bell Thursday, only to peter out after the market got a closer look at the tiny company's latest electronic commerce "agreement."In a sign of how sensitive Internet-stock investors are to buzzwords like "e-commerce" combined with big Web name brands, Interiors triggered a frenzy of buying with its press
release touting Internet-access links with Lycos and Excite. Under the agreements, the release said, its Interiors.com site "will be directly accessible through www.excite.com and www.lycos.com, establishing easy access for millions of people to view and purchase many of the company's 5,000 decorative accessories." Investors responded by bidding up shares of the company as much as 60 percent to 4 17/32
from 2 13/16. However, the market's mood toward Interiors apparently changed, and the stock reversed course to close up 3/32 at 2 29 /32 on turnover of 12.8 million shares. That's 30 times its average daily trading volume of the past three months. Why the whipsaw action? Did investors deduce the Excite and Lycos pacts consisted of little
more than run-of-the-mill advertising links to an Interiors site that has yet to open for e-tail business? "I can't find any record of an agreement between Interiors and Lycos," said Brian Payea, a spokesman for Lycos (LCOS). "The only thing they could have is a registered link. There are hundreds of thousands of those links. All you have to do is send us an e-mail."Interiors issued a similar press release last week, trumpeting a "strategic alliance" with Amazon.com. Its shares jumped 25 percent and then cooled down. Indeed, the company had added an Amazon.com banner ad to its site -- a move also made by some 180,000 other members of Amazon's "associates program. Clueless investors may have have bought Interiors, which generated $10 million in sales in the quarter ended last Sept. 30, in hope of hitching a ride along the lines of what happened when Delia's (DLIA), Bluefly (BFLY) and other small retailers signed deals to reposition established e-tail sites via high-traffic portals. Max Munn, the chief executive of Mount Vernon, N.Y.-based Interiors, told CBS.MarketWatch.com: "It's not our intent to mislead the public. We did not say that we would generate certain amount of revenue or a certain number of hits.Munn added: "Perhaps the release is vague and unnecessarily broad. If you think our PR agency misled the public, we will have our attorneys look into our relationship with the agency."
Strategic Growth International, the Long Island public relations firm that issued both press releases, didn't return repeated calls for comment. The designer of Interior's Web site confirmed that Interiors is adding links to Lycos and Excite. The links were established by routine online applications and were not operational Thursday morning, the designer said Excite (XCIT) officials were still looking for documentation of an agreement at press time for this report. |
