The Scum Also Rises
A Silicon Investor Highlight
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By David Zgodzinski
March 22, 1999
The company is called 1st Net Technologies. They cover a lot of bases. 1st Net Technologies (ticker symbol: FNTT) builds Web sites, runs a Web Mall and has revenue sharing deals with E-commerce sites, sells interactive business cards and software such as community based browsers.
And last, but definitely not least, the company "develops online investor relations programs for other public Companies." In fact, the title of the 1st Net Technologies' Web site is "Investor Relations For the Next Millenium."
This forward thinking led to the CEO himself, Greg Writer, to start up the 1st Net Technologies ( FNTT ) thread in December of last year. In this laudable approach to an open forum, he wrote..
As the CEO of 1st Net Technologies I am starting this thread as a place to communicate with interested parties regarding our stock, our products, and our services.
Not only the CEO of the company, but its President, Cliff Smith, dropped in to make sure that the thread was a nice friendly spot to hang out. He wrote on the thread to his fellow officer on March 17th..
Greg. You're out there talking to the press and flying around the country talking with all the financial bigwigs we know and you leave me here in San Diego to do all the work! I thought that as President of our Company you would at least take me with you? Just kidding!
It's only because of the tag team mentality between the two of us that we compliment each other so well. It's rare that any company is lucky enough to find two people that can bounce off each other the way we do. For those of you on our board, we welcome each of you to contact either of us at the office for your own take of our dynamic duo. I guess I should say a dynamic team.
The officers of the company had a right to be chipper. 1st Net's stock had started climbing like Jack's beanstalk. It had been trading at just over $1 just before Christmas when the thread was started. But there had been a nice steady rise up to a close of $3.12 on March 16th. The following day, the stock popped up to $5.12 on 220,000 shares, much higher than average volume. On the 18th, it traded as high as $10.50 on 579,000 shares. The stock backed off to close at $7.81 and held just under that price at the close on Friday, March 19th.
This was great action. But President Cliff Smith knew that he had to keep his eye on the ball. In a reply to a note by CEO Greg Writer, he wrote..
Yes the stock traded great but I'll tell you one thing. As President of this company I am concerned with one thing and one thing only - REVENUS!
Things looked like they were starting to come together nicely for 1st Net Technologies. Chatty was one of the early bulls on the thread. When the stock started to really accelerate on March 17th, he wrote..
Stock traded strong to the upside last 10 min. of trading. Looks like stock might open strong in the morning. Also I noticed that today's news was linked to news on Microsoft and AOL.
Later he mentioned the company's new browser for kids called the Crayon Crawler..
Looks like 1st Net is joining the ranks of the big boys now! I compared the crayon crawler to the competition, (Surf Monkey) , and quite frankly there is no comparison. Stock is still cheap 5.5 million shares outstanding fully diluted trading at $5, approx $28 mil market cap with a product like this! Go look at the market caps of the high flyers, E- Bay, etc.
But then Tom C had done some digging, and confronted Chatty on the afternoon of March 19th..
Chatty. The company's board also appointed Jeffrey Chatfield as vice president, Investor Relations. Would that happen to be you? Not very smart of you if it is.
Chatty who had actually posted his E-mail address at 1st Net on his SI Profile admitted..
Tom-Yes all of your detective work has paid off. I am Jeff Chatfield. So what is your point? I am enjoying doing posts to this thread as is everyone else! What is not very smart?
and he signed, for the first time, Jeff Chatfield, VP Investor Relations, 1st Net Technologies. Well. Was this just a case of creative investor relations? He wrote later..
Did not know there was a non-disclosure law for posting on threads! There is a non - disclosure law for newsletters, etc. Last time I checked this was not a newsletter. The only thing going on here is that our stock seems to be trading very well. Go check the recent news and you will know why.
Bear Down responded..
Chatty, My understanding of disclosure law is that disclosure is necessary on every piece of published material, not just news letters. This site would qualify as published material and SEC case history in the Samblis case would prove that the SEC regards these boards as such. Mr. Samblis is in trouble for acting like an impartial stock-picker while hyping companies that pay him. Sounds sorta like what you attempted to me.
I also find it very strange that Mr. Writer asks another gentleman to state his position in the company but never asks you to. Somethin doesn't smell right here. Why did you feel it necessary to start a thread to have discussions between 3 or 4 people that work together? And then have 1 or more act like they were not part of the company?
Josef Svejk found Chatty's explanation somewhat wanting..
Humbly report, Chatty, I was going to just say good bye and walk away, but in light of your continuing BS, just can't help myself. So, you "did not know there was a non- disclosure law for posting on threads?" As the VP of Investor Relations for FNTT you did not know this?
He pointed out that the business of the company was investor relations and finished his post with
Please be advised that the SEC has been notified by me and others, they will read EVERYTHING you've posted here from day 1.
The obviousness of the maneuvers on the 1st Net Technologies ( FNTT ) thread offended some and amused others. dacoola wrote..
I've been to two Siberian baseball games and five goat races but I ain't never seen anything goofier than this thread.
Janice Shell who is an authority on these matters, wrote..
This is the most blatant management online hype I've ever seen at SI.
And then she added..
Let's face it, guys: if they can't even deal with a thread on SI, can they run a company?? snicker, of course!!
But the 1st Net saga didn't stop there. max90 dug around and found a story published in the San Diego Union-Tribune on Feb.14, 1999, and he posted it to the thread. The story described a shady deal by one of the subsidiaries of 1st Net that touts stocks, and deals in online investor relations, and then it went on to list some of CEO Greg Writer's legal problems.
In 1981 he had been busted for growing pot on his porch. He filed for Chapter 7 bankruptcy in 1987. Writer had a number of securities infractions, and in 1990 had been barred from the securities business by the NASD, censured, and fined $200,000 as a result of a stock manipulation case. Tastes Like Chicken wrote..
Gosh. That sorta puts a stop to the "Hey, we were just having fun, we didn't know it was wrong." excuse, eh?
The Union-Tribune story mentioned Laforza Automobiles, a company that had paid 1st Net with plenty of stock options and some expensive automobiles in return for help with investor relations. Razorbak dug around and looked at the LFZA: LaForza Automobiles thread. He wrote...
Seems Chatty chose to make the first post still available on his SI Profile 'bout dis dere company! Wonder if there were any more? Slime's gettin' deeper, people.
Other members began checking other companies associated with 1st Net. Eventually, Josef Svejk started a new thread entitled Just FNTT? How about LFZA, VGTI, AXYN, WORC, etc.?
Then Bear Down found some information on the Information America data base pointing to a 1991 lien for $418,341 in unpaid federal taxes. The debtor's name was Gregory D. Writer.
And when the CEO of 1st Net made his first post in quite some time..
Too bad this is my late father!
you almost had to feel a little sorry for him.
Yes, the thread had been all over this thing like a cheap suit. Virtual high fives were shared all around. The speed with which the group found the crumbs along the electron trail leading to the footprints in the mud, was impressive. So where does it go from here? Bear Down wrote..
Non Disclosure by promoters is so prevalent today that the SEC is usually happy with getting the non-disclosing party to provide disclosure. I was speaking with an SEC attorney a few weeks back and he stated that most of the time they send a letter or make a phone call and as long as the suspect party starts complying with disclosure laws, the SEC usually lets it rest.
I personally don't agree with that policy as it basically implies violating disclosure laws is ok until you get caught. At least as far as I'm concerned this outing of Chatty serves to provide me with some insight into what the real motives of the players are here.
In this market, even the smelliest deals are getting their day in the sun. Talented operators have shown the way to incredible riches, and it looks so easy that the smaller fry can't help but think that it's their turn.
But so many angles have been covered by now, so many clever new business plans converted into fortunes, that the newcomers are trying just about anything. The threads are a stage and all the threadsters are players, and it seems that at the dawn of the new millenium every scam has a chance.
But due to the sharp work by the hounds on the thread, FNTT is TTFN.
Discussion Threads
1st Net Technologies ( FNTT )
LFZA: LaForza Automobiles
Just FNTT? How about LFZA, VGTI, AXYN, WORC, etc.?
SI Members Featured
Greg Writer
Cliff Smith
Chatty
Tom C
Bear Down
Josef Svejk
dacoola
Janice Shell
max90
Tastes Like Chicken
Razorbak
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Are there some new developments on your thread? Radical personalities?
Hot New technologies? Takeovers? Scandals?
Please let us know. All stories are welcome.
Dave Zgodzinski
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DISCLAIMER All quotations from threads are the opinions of the members who made them. No attempt has been made to verify the accuracy of these statements. No investment advice quoted on the threads is endorsed by the writer or Silicon Investor. The statements are included strictly for entertainment purposes. |
