To: Anthony@Pacific who wrote (61833 ) 11/2/2000 4:04:13 PM From: StockDung Respond to of 122087 EConnect Soars After Using Sun Micro Name in Releases (Correct) Los Angeles, Nov. 2 (Bloomberg) -- EConnect Inc. shares rose after the operator of Caribbean gambling parlors and developer of Internet banking equipment issued two press releases linking it to Sun Microsystems Inc. EConnect, which traded as low as 15 cents last week, rose as high as $2.12 today, giving it a market value of $392 million, even as the company faces a cash crunch. Current liabilities exceeded current assets as of June 30 by $7.7 million. It gained 15 cents to $1.25 in late afternoon trading. Sun Microsystems spokesman Larry Lettieri said the press releases violated company policy because they weren't first cleared with Sun's public relations department. EConnect spokesman Fred Biddle said, ''There is no formal business relationship'' between the two companies. Yesterday, EConnect stock moved from over-the-counter trading to the OTC-Bulletin Board. In March, shares of the Los Angeles- based company plunged after the Securities and Exchange Commission accused EConnect of issuing ``false and misleading press releases'' about its relationships with Palm Inc. and a small Florida broker. The SEC charged those press releases helped send EConnect shares from $1.39 on Feb. 28 to a high of $21.88 on March 9. The company and Tom Hughes, chief executive, settled the SEC complaint, without admitting any wrongdoing, by agreeing not to commit fraud in the future. EConnect has developed a ``cashpad'' that attaches to personal computers. It expects the device will enable consumers to make credit card or ATM transactions over the Internet. The devices aren't yet on the market. Name Dropping Yesterday, EConnect said in a press release that its cashpad has ``attracted the interest'' of Sun Micro. Included was a quote from Don Yarter, a Sun account executive who spoke at the company's annual meeting on Monday, where it also demonstrated its device. ``The technology that EConnect is putting together with NDFC is something that Sun is really embracing,'' said Yarter in the press release. EConnect does have a ``non-binding'' agreement to acquire NDFC, or National Data Funding Corp., which processes credit card transactions for merchants. Although the agreement requires EConnect to pay $10 million cash and other consideration, EConnect had cash of just $164,143 as of June 30. Small investor interest in EConnect is intense. More than 230,000 messages have been posted about the company on Raging Bull's Internet site, where there are less than 15,000 about Sun, which had revenue of $9 billion in the first six months of 2000. Negative Revenue EConnect's revenue was negative $462,573, during that period, because the company paid out more to winners than it took in from bettors at Top Sports SA, its chain of 12 Dominican Republic-based betting parlors. EConnect lost $28.35 million during that time, due in part to spending $5.67 million for public relations and $15.52 million on consultants. Yarter, in an interview last night, said he hadn't planned to address the shareholders but spoke at the urging of CEO Hughes. Yarter said he encouraged EConnect to use Sun's Java programming language, and set up meetings between EConnect and various Sun units. He said he thought he was quoted accurately in EConnect's press release. Yarter also said he owns a small quantity of EConnect stock. On Oct. 24, EConnect rose from a low of 15 cents to close at 25 cents, after it announced that it would exhibit in the same pavilion as Sun Micro's at the Comdex computer trade show that starts Nov. 13. ``We have a 400-square-foot booth in the same pavilion as Sun Microsystems,'' at the Sands Exposition and Convention Center said Hughes in a press release that day. Lettieri said Sun Micro has no booth at Comdex, although it is co-sponsoring some events there. Nov/02/2000 15:26 ET For more stories from Bloomberg News, click here. (C) Copyright 2000 Bloomberg L.P.