Check out the last sentence..."spurious guessing and dubious
information"??? There is none of that here... right?
Reuters, Monday, March 29, 1999 at 16:44
(Updates with closing prices)
By Lydia Zajc
TORONTO, March 29 (Reuters) - Internet trading frenzy is
stretching north of the U.S. border as investors look for
Canadian plays on the North American cyberspace explosion.
A triumvirate of former penny stocks, high up in the
Toronto Stock Exchange actives roster for days, attracted more
heavy buying on Monday.
Dejour Mines Ltd. (TSE:DEJ) was the most heavily traded
stock on Monday, jumping to a record high of C$0.99 before
pulling back to trade up C$0.21, or 35 percent, at C$0.81 on
more than 12 million shares.
Stock in the Vancouver-based miner started a meteoric rise
last week after the company dropped $250,000 on a stake in
Dallas-based InstantDocuments.com, a cyberspace courier
service. Dejour has shot up from C$0.14, where it closed on
March 22.
Toronto-based online auctioneer Bid.Com International Inc.
(TSE:BII) rose C$1.65 or almost 12 percent to C$15.55 on nearly
eight million shares after months of gains. A week ago, Bid.Com
was trading at just C$7.85.
Internet firm Dion Entertainment Corp. (TSE:DIO) jumped 28
percent or C$0.66 to C$3, after hitting a record high of C$3.10
earlier. The White Rock, British Columbia-based firm plans an
electronic bingo game site with advertising, data mining and
electronic commerce.
Dion closed last Monday at C$1.69.
Internet stocks, particularly in the United States, have
become the play of choice for day traders -- those who slip in
and out of shares several times in a session looking for swift
returns.
Some analysts warn that the hype surrounding Internet
stocks carries its own risks. Jason Zandberg of Pacific
International Securities cautioned that sooner or later one of
these high-flying firms will cruise too close to the sun and
could create "the Bre-X of the Internet", tainting all
cyberspace stocks in the minds of market players.
Bre-X Minerals Ltd. was a Calgary company that won
notoriety for its fraudulent claim to have made one of the
biggest gold finds of the century. The resulting scandal
poisoned the market environment for many small mining
exploration companies.
"It's all exotic stuff, there's no question of that," noted
Fred Ketchen, ScotiaMcLeod's director of equity trading.
"The problem is that Canadians have not had domestically
any of this Internet-type stuff that they can really get their
teeth into. Now they've found a few and while I think that they
are participating, it may well be that Americans are
participating even more," he said.
Many people expect the Internet to become an even more
powerful commercial and entertainment tool, but few financial
analysts can take these fledging stocks seriously right now.
Michel DeLavergne, an analyst at Dlouhy Investments, said
he doesn't analyze these companies because they have been bid
up by short-term investors looking for immediate gains.
"The reason why I don't follow them is: it's pretty much a
day-traders' game right now, and once it settles down there
will be some winners and a whole lot of losers," DeLavergne
said.
"And it's not our business. Our clients are institutional
clients, they're not interested in that."
Internet-related stocks have risen to incredibly lofty
levels in a short period of time, DeLavergne said.
"(The) valuations of the companies make no sense," he said.
"As an analyst I look at that, and I could just shake my head
and move on."
Zandberg also said he does not follow these stocks although
he has kept an eye on their leap into the stratosphere.
"There's a lot of money been made with Internet stocks," he
said, some by risk-takers who just hear a name and jump on
board. "You don't have a lot of sophisticated investors looking
at business plans."
Zandberg has noticed the influence of Internet chat rooms
on these types of issues. Cyberspace chat lines are meeting
places on the World Wide Web where people can keep their real
names private, but publicly weigh in with their opinions.
Much of the chatter is spurious guessing and dubious
information, he said. "(From) what I've seen, there hasn't been
good quality information." |
