It was posted over on RB. This is a paste of that post; I have no way to know with certainty if it is an accurate copy of the original, which, oddly, isn't in the archives of threadtalk, at least there's no link to it at the moment.
By: BobSims
Reply To: 15111 by Acts2
Tuesday, 7 Sep 1999 at 11:34 PM
EDT
Post # of 15714
I'm in the news. ;)
By David Zgodzinski
September 7, 1999
Amway launched its foray into Ecommerce on Sept. 1. The
site is called Quixtar, an interesting name, with
connotations of instant fame and fortune. Amway reps had
been pumped for the venture and even with 70 servers, the
site overloaded. Days later, it was difficult to access the
Quixtar.
The site's difficulties bring to mind the story of another Web
business called Hitsgalore.com. It's a tale full of twists and
turns, and as Henry Volquardsen posted to the
HITSGALORE.COM (HITT) thread...
You can't make some of this stuff up.
WVMayor got into Hitsgalore's stock early on, and got out
early enough. Besides investing, he did business with the
company. He explained how Hitsgalore.com, which likes to
bill itself as a "porn free business-to-business portal,"
operates...
1) Keyword placement - You buy a keyword in
the search engine.
The concept here is much the same as GoTo.com's
business model...
2) Free lifetime banner placement - You get listed
in the directory, send the company a banner and
it rotates your banner on its site for infinitum (or
as long as it is in business... whichever comes
first).
WVMayor explained how he was less than thrilled by the
results of his banner ads on the site. But when you get the
free banner ad, you are invited to take part in...
3) Banner sponsorship - alrighty.. basically, what
we have here is a new form of network marketing,
without the downline overrides.
You pay Hitsgalore $99 and join a random selection
system. Every time someone signs up for free banner ads,
one of the banner sponsors is chosen. Hitsgalore tries to
sell the "banner sponsorship" concept to the company
that's signed up for the free ad...
If Hits succeeds in getting $99 out of these
prospects, then we get $25. We can have them
sell up to 200 new sponsors for us.
All in all, not a bad-sounding network marketing business
model. bob sims started the HITSGALORE.COM (HITT)
thread on April 8 with this upbeat synopsis...
Here is the newest business oriented search
engine and technology business center that is
one of the few that's really making money. It's
currently selling at $5.00 a share compared to
others that have gone well over $100 and split.
Watch out Yahoo, AltaVista, Microsoft,
Netscape, GO...
francis terry had high expectations...
Been in some stocks that almost made me want
to get away from the market but Hitsgalore will
make up for all of my previous mistakes.
DOC HOLLIDAY was a big booster in a peculiar way...
This is not a company of which somebody could
say, "They have a unique product and solid
management, and one day, a year or two down
the road, shareholders will be pleased to have
stayed with them." The time for Hitsgalore is right
here and now, and I don't think I could have
written a more encouraging script if I tried to
describe Hit Galore's initiation.
The stock was moving up, breaking $6 and holding. paul
feldman posted a press release on April 16. The Life
Foundation Trust announced a letter of intent to invest $10
million in the company. The trust, "with assets in excess of
$1 billion," would receive 2 million shares of Hitsgalore in a
lockup agreement. The news vaulted the stock over $12.
tranzz wrote...
I am speechless, what else can I say about this
darling...NASDAQ next stop.
On May 4, a national radio advertising campaign was
announced. Revenues for April were announced - double
the previous month's take. bob sims wrote on May 6...
This is a great growth stock that's still in its
infancy. Doubling revenue each month,
acquisitions, alliances, little float, California
corporation, NASDEC coming. You couldn't ask
for anything better.
But on May 9, wireless wonk rained on the parade...
I see that Dorian Reed is involved with this
company.
He pointed out that Mr. Reed, the founder and majority
shareholder of Hits, had operated a company called Internet
Business Broadcasting which was sued by the FTC in early
1998 for spamming false business opportunities to lease
"billboards" or "banners" on Internet newspapers. Wireless
Wonk pointed out later...
Oh, just for your information, if Mr. Reed is an
officer or principal in this company, it is highly
unlikely that the company will be granted a
NASDAQ listing if the FTC action is still pending.
Then the bashers, short sellers and fun seekers started
circling over the thread like seagulls when the garbage is
thrown out. A few posters found some pornographic links in
the search results, though "porn free" was one of the site's
mottos. Others searched on common business terms at
the site and found almost no links. The data base of those
who paid for keywords was thin.
The following day, all this was forgotten. The Life
Foundation Trust was happy with its first $10 million
investment that it had decided to invest $100 million to
purchase 4 million shares of Hitsgalore.com at $25 each.
The stock flew up over $20. BG Smith commented...
Wireless, you are just so picky. You probably
expect them to send someone over and do your
floors and iron your shirts. It only has a market
cap of a billion dollars. Stop asking questions
about that stuff. It is going to $100 and then it will
probably split and go back to a hundred. These
things go up forever, so stop with all the
questions.
He added...
There's untold numbers of trusts out there that
throw $110 million into start up bb companies.
Nothing unusual here.
Later, the Trust revealed that the $100 million investment
was actually an IOU secured by interests in Texas oil
properties. But it was tough to find out much about the
Trust. An answering machine answered the phone. Jeffrey
Mitchell discovered that the trust shared offices with a
small flight simulator company. Ð did some digging and
wrote on May 14...
Life Foundation Trust apparently:
* never issued a news release, or was mentioned
in a news release, until the recent Hitsgalore deal
* was never mentioned in any news story in a
newspaper for a city of any size
* was never mentioned in any SEC filing
* was never mentioned in any of the oil industry
news sources that Lexis/Nexis receives.
Coincidentally, on May 12, Bloomberg carried a story.
Reporters discovered that the FTC had indeed won its case
against Dorian Reed and Internet Business Broadcasting in
1998. There had been a $613,000 judgement against the
defendants. It was the first time that the FTC had brought
action against anyone for fraudulent use of email
spamming. None of this had been reported to the SEC.
Things went from half full to half empty fast. Hitsgalore's
stock lost more than 50 percent of its value in one day
following the Bloomberg story.
Stalwarts on the thread went into damage-control mode.
slaffe wrote...
It is my opinion that this stock was brought down
by professional shorters/bashers, perhaps mm's,
large money managers etc simply so that they
could accumulate shares at a lower level.
bob sims pointed out that the CEO of the company was
Steve Bradford, not Dorian Reed, and he began to
repeatedly post this sentence...
What criminal activity is Hitsgalore committing?
The stock bounced briefly. But at the end of the day, the
firm of Weiss & Yourman announced a class-action suit
against the company for failing to disclose Mr. Reed's legal
problems. The following day, Dorian Reed resigned as a
director of the company.
Bill Ulrich wrote on May 14...
Another class action, this one from Schiffrin &
Barroway.
On May 17, yet another story in Bloomberg pointed out that
the company's PR person had a history of investor fraud.
Dako explained it this way...
Story says that at Lew Lieberbaum & Co., he
"defrauded customers by selling them shares at
prices which were neither fair nor
reasonable".....thereby uniquely qualifying him for
his present position re Hitsgalore.
flodyie wrote on May 17...
Stull, Stull & Brody Announces Class Action
Against Hitsgalore.com.
The company's 10-K filing later that month regurgitated
more. On May 27, Daniel Chisolm found this about the
original $10 million "investment" from Life Foundation
Trust...
By my reading, the company received an IOU,
due in 12 months, for $10 million. In exchange,
they issued 2 million shares. As a good faith
deposit, a postage stamp collection was placed
under the care of a third party.
The collection of stamps from the country of Aden (now part
of South Yemen) was said to be worth $50 million.
Oh, and there were a couple of other things. First, the
company's financial situation at the end of '98 had caused
an outside auditor to point out that there was ''substantial
doubt about the company's ability to continue as a going
concern.'' Janice Shell wrote about another detail revealed
in the 10-K filing...
In 1992, Mr. Dorian Reed was convicted at trial of
wire fraud and unlawful use of access device and
served a 10-month sentence in a federal prison
camp and successfully completed the rest of his
term on supervised release.
She added later...
Naturally it's totally unreasonable for people to
have ANY doubts about a company founded by a
convicted criminal who remains its largest
shareholder.
Not great news for the stock. Understandably, the bulls
began silently dropping off the thread, one by one. But bob
sims remained to madden the bears with his wooden posts
complete with artificial spelling mistakes...
I can understand your point of view wishing a
stock will go done. Depression is a serious
problem in the United States.
And his spamming company press releases and his
constant repetition of the question...
What criminal activity is Hitsgalore committing?
Bear Down wrote on May 20...
You must be getting paid to act this dumb
Janice Shell wrote...
"bob" is by no means as stupid as he pretends to
be, but then on the other hand he's not nearly as
smart as he thinks he is, either.
And Ð was impressed, in a way...
Bob, those people who accused you of not being
smart were way off the mark. I believe otherwise.
In fact, I think you are quite clever in the way you
try to bait critics of the company into posting
something that would set them up.
When bob sims wasn't droning the party line, he made it
clear that he was the little guy, being hounded by the evil
shortsellers...
It's not my business to dig up anything on you
bashers. And besides I'm too busy with my
janitorial duties at work. I'm not a big player in the
stock market like you guys. I made over $5,000
this year in the market. To me it's a lot of money.
I'm a Christian. I don't like the vulger language
you guys called me.
Gamblers have an urge to lose. Murderers, a deep, dark
desire to get into the box with Frank Pembleton, homicide
detective. They want to let the mask slip for a second,
revealing who they really are so they can finally show off
about their crimes.
On May 27, bob sims wrote with an uncharacteristic
sinister depth...
Deception is a constant; it can be found at any
time, any place. Athletes use it to fake out a
competitor, politicians use it when they speak,
and markets use it to trick you into doing what
you should not do. Some primatologists refer to
deceptive prowess among primates as a rationale
for the development of the large primate brain.
The ape with the larger brain outsmarts other
apes for food or a mate, and goes on to
reproduce. In the jungle of financial markets you
need to be smarter than the average market
monkey who will do anything to steal your
bananas,
Hitsgalore will do just fine.
Less than two hours later, flodyie posted a Hitsgalore press
release stating that the company was planning to sue
"anonymous posters on the Internet using aliases and
pseudonyms to camouflage their true identities in a
nationwide campaign to destroy the reputation and
undermine the business affairs of the Company."
The revelations in the 10-K about criminal convictions,
auditor warnings and stamp collections instead of cash
weren't the problem. The posters on the threads were the
problem.
And here again was bob sims on June 14. But the contrived
spelling and grammar mistakes were dropped. He appeared
to capitulate, congratulating the sell-outs and shorts, but
with a leer...
Dr Stocks, Daniel, etc:
You're absolutely right. You ought to sell. It looks
like I was wrong and you guys were right. It's
hard to admit it but I do. Oh well, good luck
everyone.
Less than two hours later, Rico Staris posted the news...
PRESS RELEASE!...NEW LAWSUIT!
Hitsgalore apparently went through with it. They announced
suits naming 100 people for libel, interference with business
relations and civil conspiracy. These supposedly illegal
deeds were committed by posting on the Hitsgalore
message boards. The company was seeking a total of $20
million in damages. The Complaint named Janice Shell,
and five John Does -''Paul Kersey,''- ''Mayor,''- ''Mr.
Pink,''-''mshater,'' and John Doe Nos. 5-100.
Just before the company announced that it was lashing out
at their critics, bob sims posted portentous messages, and
he sure seemed like a different guy.
As of this writing, the lawsuits have not been served.
Evidently concluding that he was the best man for the job,
on July 8 the board of directors voted unanimously to
reinstate Dorian Reed as Chief Technology Officer and
member of the board. The company's auditors quit on July
28 and were soon replaced by another firm. The stock of
Hitsgalore.com is trading near 52-week lows.
What's next for this company and its investors? Expect the
unexpected. Mr. Pink polished up his crystal ball and
peered into the future. His vision...
In the next chapter of the Hitsgalore soap opera
Mustaffa sells his faithful girlfriend (Dorian Reed)
to Bubba for a pack of Kools.
ragingbull.com
...Mezz - A grub, of sorts. |
