Jack, don't be so quick to disregard the opportunity to call the company and talk to people, even VIP's. Sure they're not going to give you "new news", or say anything substantial that has not already been said, as that would be giving "inside information", but read on, this from today's week-end edition of the WSJ Interactive Edition. Read especially the paragraph I have put in bold about halfway down. If you think this is more lies, then you could always call the WSJ and tell them.
DK
February 22, 1997
On-Line Investment Groups
Yield More Facts, Less Hype
By RIVKA TADJER
Special to THE WALL STREET JOURNAL INTERACTIVE EDITION
After receiving a tip on a potentially hot stock, Carl Darnall punched up the company's fundamentals on his computer, checked a recent stock quote and put in a direct call to its chief executive to learn more about its products.
<Picture: Cyber Personal Finance>But Mr. Darnall's no hotshot money manager or Wall Street analyst. He's a 35-year-old captain in the U.S. Army and an amateur investor living in Fayetteville, N.C. He got the tip on the company, a Skokie, Ill.-based dairy-products maker called Lifeway Foods Inc., from a source he has come to rely on: an on-line investment discussion group.
Once mainly a breeding ground for con artists looking to make a quick buck off novice investors, a number of stock-discussion groups are slowly evolving into a sounding board and research tool for serious investors.
Lee Doble, 50, a sales manager with Aetna U.S. Healthcare who subscribes to several investment discussion groups, attributes the increasing number of credible investors on the newsgroups to timing. "I think the real savvy investors have been too busy to take a real look at the Internet until now," he says. Although Mr. Doble says he hasn't yet invested in any of the stocks discussed in his newsgroups, he feels that by subscribing he is reaping the benefits of being involved in an on-line "think tank."
Messrs. Darnall and Doble are two of a new breed of on-line investor. Most are not pros, but they have learned how to tap into the knowledge of a growing community of professional investors who actively participate in investment mailing lists, listserves, Usenet, bulletin boards and discussion groups. These discussions offer investors an opportunity to cull some of the best investment advice and share their knowledge and experience with others.
Each day, Mr. Darnall logs on to the Internet and checks his e-mail for the latest postings to his favorite newsgroups and listserves. What he likes about the newsgroups he participates in is the mix of serious, long-term investors and rank amateurs who ask questions, provide advice and offer suggestions on investing, and many times include valuable first-hand information about the publicly traded companies under discussion.
Mr. Darnall's tip about Lifeway Foods came from participants in the Great Stock Project financial-news discussion group. What impressed him most was the way the newsgroup subscribers heatedly debated the case for and against the success of the company's main product, kefir, a yogurt-like nonfat dairy product that has the sweetness of a dessert topping.
Some participants provided financial information taken from Lifeway's home page, while others who had actually tried the product offered their opinions on its potential and also contacted local health-food stores to inquire about the firm. Another helpful posting pointed subscribers to a recent magazine article where they could learn more about the company.
"And I never would have thought of calling the CEO to get some answers to questions that were making me nervous about the stock until someone in the group suggested it," says Mr. Darnall. "But I called, got immediate access to him, and it was great."
Lifeway's chief executive, Michael Smolyansky, spent about 20 minutes on the phone with Mr. Darnall, who in turn shared the details of his one-on-one conversation with the newsgroup. This kind of interaction has become invaluable to newsgroup subscribers, Mr. Darnall says, because they may never have found this kind of detailed information on such a small company from financial publications or corporate database services.
Ever wary of stock hypesters and day traders seeking to capitalize on a short-term spike in a stock's price, many newsgroup participants now demand subscribers provide extensive documentation and financial information to back up statements made in e-mail postings.
Ira Morrow, an analyst for Gartner Group, a market-research firm based in Stamford, Conn., attributes this heightened sense of caution among subscribers to recent well-publicized incidents where stock hypsters used on-line newsgroups and bulletin boards to manipulate stock prices.
Shares of Quigley skyrocketed in January and just as quickly fell back to earth as a direct result of on-line discussion groups, he says. According to Mr. Morrow, a couple of Quigley shareholders looking to drive up the stock's price contributed to these discussion groups and talked up the opportunity to get in on the ground floor of a sure-thing. It worked; Quigley's price soared and the shareholders sold at a handsome profit, says Mr. Morrow.
The Doylestown, Pa.-based company, whose zinc-glucomate lozenges were being touted on-line as a cure for the common cold, has asked the Securities and Exchange Commission to look into Internet postings about the company, which it claims are false and misleading.
Six months ago, newsgroup subscriber Mr. Darnall was burned by jumping on the bandwagon of a stock hyped mercilessly on several investment newsgroups. "In October, when I joined Great Stocks, it was much more chaotic," says Mr. Darnall. "For instance, there was a lot of gossip about Novell and I bought into the stock and paid the price when the stock fell."
Mindful of the vast potential for fraud, many newsgroups and posting boards that are moderated by individuals have taken to policing their own discussion groups and posting warnings for subscribers in an effort to weed out con artists.
Fearful that stock hypsters were preying on its newsgroup, Great Stocks, which is moderated by Doug Blair, who created the on-line discussion group for the sole purpose of analyzing stocks, instituted a policy where subscribers are automatically dropped from the group for repeatedly posting rumors or innuendo about stocks without hard facts to back up their claims.
"Last October that just wasn't true," says Mr. Darnall. "When Novell was a big item last fall, all the discussion was hype, with no pertinent info backing it up. Now no backup means you catch hell from the moderator."
Other newsgroups are joining the credibility movement by simply implementing a registration process, explains Tom Hyland, Internet analyst for New York-based Coopers & Lybrand. What he envisions happening is an inevitable trade-off of privacy for the opportunity to obtain more valuable information.
"If you want to be part of an Internet community populated with experts you will have to show credentials of some kind, or at least give enough personal data so that someone can hold you responsible for your comments," he said. "The free-for-all bulletin-board mentality that is the trademark of the Internet will not work for investors seeking real financial information.
He warned, however, that on-line discussion groups still have work to do before investors can feel confident that the information they are receiving on a company is reliable. "It's definitely not all the way there yet -- investors should proceed with caution."
"It can be hard to detect the stock-hypers," admits Mr. Doble. "That's why I always do my own research after -- if you're going to invest based on information additional research is very important."
Sites
Lifeway Foods Inc.
Great Stocks Project
Motley Fool
Newsgroups
misc.invest.com
misc.invest.stocks.com |
