IS DREAMLIFE.COM JUST A DREAM?
Whatever it is, it's a loser on the celebrity
circuit. Motivational speaker Tony Robbins better
awaken more than a giant at Dreamlife, because his
show could be ending before it gets to prime time.
msnbc.com
Motivational speaker Anthony Robbins on stage during one of his seminars earlier this year: Can he make a flagging stock perk up?
Dreamlife.com is just a figment
The big joke in this deal is that the media big shots are being taken to the cleaners, too
OPINION
By Christopher Byron
MSNBC CONTRIBUTOR
April 4 ? What I want to know is, how come I can?t get cut in on Wall Street?s good stuff ? for example, a deal like the one that dropped like ripe fruit not so long ago into the laps of Bryant Gumbel, Tom Brokaw, Joe Flom, Bob Wright, Andre Agassi, Wayne Huizenga, David Wetherell and various others?
WHAT DO all these people have in common ? besides of course that they?re a lot better known than the cranky crowd here at Eye to the Keyhole and already have more money than they know what to do with? The answer turns out to be a friend at Allen & Company ? the murky-as-swamp-water investment banking operation that shills on Wall Street for the T&A-obsessed suits that run the Hollywood movie business.
From the evidence, it would appear that a certain mysterious somebody or other at Allen & Co. offered to do for the boys what was undoubtedly presented to them as the favor of all time: namely, to let them buy into an upcoming ?hot stock? at somewhere around 50 percent of its then-prevailing market price.
The stock in question? An outfit going by the name of Dreamlife Inc. Attentive visitors to this space may recall Dreamlife as the subject of one of our patented Eye to the Keyhole rants back last August when the company ? then known as GHS Inc. ? was being trussed up as a disguised penny stock hustle for the greater financial and personal glorification of the ubiquitous and ever-grinning Mr. Anthony Robbins, the Giant Within guy of late night cable TV infomercial fame.
A CASTOFF OF NET FAILURES
On March 30 this outfit, which appears to have been concocted from the castoffs of other failing Internet ventures, filed its first full-year ? and latest quarterly ? financial results as an actual, operating business. And wouldn?t you know it but the results are as follows: Revenues = Zero; Net Losses = $14.7 million.
Dreamlife, Inc. (DLIF)
price change
$7.00 -1.750
More about the details in a minute also, for frankly, they?re the sorts of numbers to warm our black hearts here at Eye to the Keyhole. The numbers are, after all, evidence aplenty of what amounts in practical terms to nothing more than a business fantasy ? yet another Wall Street financed scheme to create a dot-com ?interactive community? on the Web.
As with so many others, Dreamlife Inc. is best appreciated not as a real business so much as a revenue-free enterprise consisting of dozens of people rushing about madly, generating millions in spending to no apparent purpose or result ? all of it being paid for, in the end, by gullible investors ready to plunk down their money simply because some grinning celebrity with a lantern jaw profile is the face on the hustle.
What I don?t get, though, is how come I wasn?t invited in on Tony?s action at 50 percent off ? just like Andre, Wayne, Bryant and Tom were ? so that I too could help Allen & Co. clean the clocks of Wall Street?s everyday yokels. Maybe it?s because the folks at Allen & Company just never figured it was worth the trouble to drop a deposit into the favor bank here at Curmudgeonly Arms, whereas cementing various friendships with the networks....well, that?s certainly going to get you more bang for the buck. (NBC, which employs Tom Brokaw, is a partner in MSNBC.)
And wasn?t that really what the folks at Allen & Co. were seeking to accomplish when they dropped Toothy Tony?s stock, at near-to half off the retail price, into the laps of Messrs Gumbel, Brokaw and the others ? that is, to try to assure Mister T that if the media doesn?t have a lot that is good to say about his giant-awakening business, then at least some of the biggest wheels in the game won?t publicly have anything bad to say, either?
The pocket-picking of the hoi polloi began with a foundering penny stock named GHS Inc. that Allen & Co. had been shopping around for years. To help Tony become the captain of his financial destiny as a corporate CEO ? without all the annoying folderol of actually having to go public through a Wall Street IPO ? Allen & Co. took GHS Inc. by the nape of the neck and basically give it to Tony for free.
This way Tony wound up with what eventually became a controlling 57 percent stake ? for which he paid nothing ? in a business that by last December Wall Street was valuing at close to $640 million solely because of Tony?s involvement with it. The business? An Internet ?community? with no operating Web site, no coherent plan for making money ? no nothing, in fact, but Tony?s blinding, Ultrabrite smile.
What the operation needed most of all, of course, was money ? anybody?s money but Tony?s, it seemed ? so to get some the gang at Allen & Co. reached out last May and put the muscle on roughly 40 private investors around town, including the Wright, Gumbel and Brokaw trio. Altogether, the group ponied up $15.1 million in return for stock in the company at the equivalent price of $8.19 per share ? this when the company?s shares were selling on the open market for more than $16.
The boys must have thought they were getting a sweet deal, right ? I mean, how can you miss when you get to buy a $16 stock for $8.19? Unfortunately, what they may not have realized is that the stock they were buying was listed on the Over The Counter Bulletin Board ? just about the cheesiest, rankest, most volatile sub-basement on Wall Street.
Nor did they apparently appreciate what it meant to invest in so-called ?unregistered? shares: You can?t sell them until the company registers them for sale with the Securities & Exchange Commission, which normally cannot take place until at least six months after the shares are initially issued to the investors.
In this instance, more than 1.8 million shares were involved in the private placement, and the very instant the company filed its registration statement for the shares on January 4 the market price of the shares began to weaken, from $16.50 on the 4th, to barely $13 by the 28th when the SEC approved the filing as ?effective? and allowed anyone holding the shares to sell them if he chose.
Why the weakness? With no more than about 10 million shares available for trading day-to-day in the stock?s public ?float,? and only a few thousand actually changing hands daily in the market, the addition of 1.8 million new shares to the float meant an enormous increase to the supply of stock on the market, with inevitable downward pressure on the price.
BIG SHOTS LOSE BIG
How many of the private placement?s investors dumped their shares as soon as they could do so, can?t be known. But it is clear that anyone still holding them is wishing he?d gotten out while the getting was good. As for any who didn?t? The big joke in this slimy deal is that the media big shots such as Brokaw, Gumbel and Flom are being taken to the cleaners, too. That is because daily trading volume in the shares has jumped more than 400 percent since January even as the stock price has fallen by 40 percent, to $9.88 per share.
In other words, folks, it comes down to this: Any of the private placement?s investors who have bailed out of their stock, have only been able to do so by simultaneously driving the price down for all the suckers who never got the benefit of buying in at a discount in the first place. It is that latter group ? the so-called Greater Fools of Wall Street, who had to pay full boat for their shares ? who have once again been left standing around wondering why an investment that seemed so promising at $16 per share has now turned around and bitten them in the rear. What they don?t realize is that they are getting poorer so that a clique of bicoastal media big shots can get richer at their expense.
Nor does the future hold out much promise of improvement for this horrid little outfit. Nearly a third of the company?s cash proceeds from the private placement had been spent by Dec. 31, with virtually all of it being accounted for by general and administrative outlays ? that is, the simple business of unlocking the front door each morning and turning on the lights.
As for actual revenues, well, forget it. Of the company?s 41 employees, precisely four were in sales and marketing as of year end. A quick canter through the company?s appallingly dull Web site (www.dreamlife.com) reveals exactly one advertiser for the whole shebang: a Web-based company called eDiets.com.
This is a business? Where?s the energy, where?s the urgency? Don?t these people realize they are spending the public?s money?
Day-to-day management of the business is in the hands of a 30-something young woman named Beth Polish, who cut her Internet teeth managing the finances of the horrid iVillage Inc. Web site when it was first getting going. Her sidekick is a young lady named Ms. Philicia Levinson who comes from a background in human resources.
The company?s board of directors is a collection of comic relief characters from the executive suites of medialand. There?s H. Peter Guber, immortalized in the unforgettable ?Hit & Run? by Nancy Griffin and Kim Masters as the dour alter ego of Jon Peters as the joined-at-the-hip duo who lost $3 billion while running Sony Corporation back in the early 1990s.
And what about Peter A. Lund, another member of the board? His claim to fame seems to be to have hopped around more top jobs at CBS than any other man alive: President and CEO of CBS Television for six months in 1997; President of the parent corporation for 14 months beginning in late 1995; President of the Broadcast Group for 10 months in 1995.
And let?s not forget the fabulous Mr. Frederic Rosen. He spent his days as head of Ticketmaster Group Inc. (the concert and sports events ticketing service) strutting around Beverly Hills back in the 1980s, putting on airs like a half-quart Bruce Willis. When Barry (The King of All Media) Diller bought Ticketmaster and folded it into his USA Networks Inc. outfit back in 1998, Mr. Rosen quit. Now he has resurfaced as a director of Dreamlife.
It just goes on like that ? name after name, all of them now barnacled onto this gussied up penny stock as if Dreamlife Inc. were a halfway house where executives in rehab could try to put their pasts behind them on the road to career recovery.
Is this a stock with a future? If Bryant, Andre and the others weren?t dozing back in late January when the private placement registration went effective, it?s a question they no longer have to care about one way or another because they?re probably long gone from this frightful mess. As for the others, well, here?s hoping Beauty Boy Tony Robbins can awaken more than a giant at Dreamlife Inc. because, short of prestidigitation, the show could be ending for this act before it even gets to prime time.
You can reach me by e-mail at cbyron@optonline.net.
This column appears courtesy of The New York Observer, where it first appeared. For more of the Observer, visit its Web site at observer.com
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