Its hitting the fan DANNY! I told it was going to happen!
Whiz Kid Has Clout in Penny Stocks: Susan Antilla (Correct)
Whiz Kid Has Clout in Penny Stocks: Susan Antilla (Correct)
(Corrects stock price in 4th and 10th paragraphs of story
published Wednesday. Fixes typographical error in 15th
paragraph.)
New York, March 3 (Bloomberg) -- I don't have anything
against 15-year-olds. There is one in my house, in fact, who
actually takes his plate out to the kitchen each night when
dinner is over.
I listen to his opinions about movies, cars and bad trades
by the New York Yankees. I would not, however, even consider
entertaining his recommendations on the stock market, figuring
that, at 15, his thoughts would be at best faddish, wide-eyed and
lacking in perspective.
So why, I'm wondering with increasing alarm, are investors
going nuts following the advice of someone else's 15-year-old --a
very smart Teaneck, New Jersey, kid who is the talk of investment
message boards and whose own Web page is so popular that he
intends to start charging admission?
I learned of the influence of Dan Miller, a ninth-grader at
The Frisch School in Paramus, New Jersey, in trying to divine the
reason for movement in shares of Filtered Souls Entertainment
Inc., a company that admits it has no significant sales or
earnings and whose stock had traded at a dollar a share on a good
day.
Shares of the Vancouver-based company, most recently
involved with record production, jumped 92 percent to 1 27/32 on
Feb. 22 on unprecedented volume of 1.36 million shares. (Filtered
Souls had traded 3,000 shares on the previous trading day.) An
analyst recommendation? Some great news about business prospects?
The signing of Mariah Carey?
High School Savvy
None of the above. The rally, as it turns out, came after
the stock was touted by Miller, the high school student who
previously recommended penny stocks including MPTV Inc., a time-
share marketer, and WCTI, a provider of Web site search
technology.
Miller, not yet old enough to drive, touted Filtered Souls
on the Internet and CNBC made him the subject of a feature story.
''He's a young lad who apparently said something on TV,'' says
Ian D. Lambert, president of Filtered Souls. ''But I don't know
him, have never spoken to him and never saw him.''
CNBC's story elicited so many inquiries that the network put
directions to Miller's Web page on its own Internet site. (CNBC
could not immediately say whether anyone mentioned Miller's stock
picks on the air, although it did say that his stocks were not
mentioned in the feature story.)
Although Miller said in a telephone interview that he
initially learned of Filtered Souls via an anonymous e-mail, he
took the initiative to call disc jockeys and find out what they
thought of the hip-hop records Filtered Souls was distributing.
''I got positive feedback from them,'' he says.
Consider the Source
He moved on to read an ''article'' about the company on the
Web page aheadofthestreet.com, where ''the share information
looked good,'' in Miller's view. Business Financial Network,
which produced the aheadofthestreet.com report, predicted a
runaway surge in the stock to between $8.73 and $14.25 over the
next 12 months from less than $2. It also suggested in an
unwittingly hilarious disclaimer that investors would be well
advised to consult the company's annual report and quarterly
report -- documents that tiny companies like Filtered Souls
aren't legally required to produce.
Miller says he's aware that Business Financial Network was
paid a fee of $24,000 for its rosy predictions, but that it was
actually a press release, and not the report, that ''clinched''
his decision that Filtered Souls was ''an excellent stock pick.''
Yet the press release hardly had the stuff of great
investment potential. Miller says he was impressed that Filtered
Souls mentioned ''big musicians'' including Bob Dylan and Elton
John in their press release, but it turns out those two artists
have no affiliation with Filtered Souls. (They did, however, once
hire the public relations firm that Filtered Souls has decided to
hire.) That press release may have ''clinched'' his decision
about Filtered Souls, but it is curious to note that the release
was dated Feb. 23 while Miller's recommendation went out on Feb.
22. There was talk ''that news was coming,'' Miller explains.
'Whiz Kid'
After news of his ''buy'' had hit the Web page Silicon
Investor on Feb. 22, one early posting on Silicon Investor at
10:01 noted that ''Daniel Miller, The Whiz-Kid-Stock-Picker from
CNBC,'' had done it again. A copy of an e-mail signed ''Dan
Miller'' noted that volume began to pick up before he put out his
recommendation ''because of the people who figured it out'' ahead
of Miller's pronouncement. (Similarly, Miller today told
followers on his own Web page that he had intended to recommend
HealthWatch Inc., a software company, but that ''people found out
yesterday.'' In early trading today, HealthWatch rose 15/32 to 2
7/32, before falling back to a 3/16 gain.)
On Feb. 22, Silicon Investor kept gushing. By 10:17, it
posted an e-mail saying, ''Daniel Miller is The Man. FSOL is
soaring.'' At 10:36, someone calling himself Mr. Metals said,
''This whiz kid is incredible. Looks like he has quite a
following. Since he announced FSOL at 9:45, it has shot up 150
percent.''
It closed at 2 31/32 yesterday.
What Next?
Dan Miller's father, Leon Miller, says he's investigating
his son's legal obligations now that the boy is recommending
stocks, buying shares of the companies he touts and considering
adding a fee for his followers. ''One of his friends made $8,000
last week,'' says father Leon. ''Not bad, huh?''
Son Miller, meanwhile, is all the rage at Frisch, having
been pursued by print, broadcast and cable reporters who are
wowed by his investment prowess. ''People are saying David
Letterman is next,'' he wrote to ''Mr. Metals'' in a Feb. 23 e-
mail posted on Silicon Investor.
He may be popular. He may be bright. And his research may be
a lot better than what most investors do. But why didn't he get
around to making that most important call of all -- the call
demanding that Filtered Souls management get on the phone and
answer the tough questions any analyst would ask?
''I've been at school,'' says Miller. But that didn't stop
him this morning. He released a recommendation of Canterbury
Information Technology Inc., using a school computer between 9:30
and 10 a.m. Eastern Standard Time. By 10:30, the stock had more
than doubled to 1 3/4, and Miller's Web page had seen more than
1,000 additional hits.
The sudden spurt makes Stanton Pikus, Canterbury's chief
executive, a little nervous. ''The less I know about this kid the
better,'' he said. |
