This is the kind of stuff that Jon Tara was talking about a few days ago relative to Zulu Broadcasting's name being mistaken for Zulu-tek:
Error on Internet Stock Symbol Proves Costly (7/28)
By DEBORAH ADAMSON
c.1998 Los Angeles Daily News
SIMI VALLEY, Calif. -- In her rush to invest in an Internet company,
Levina Goodrow took a wrong turn on the information superhighway.
As the 48-year-old single mom got ready to leave her house one recent
morning, she heard two investment pundits on television talking about
CitySearch, a firm in Pasadena, 10 miles northeast of downtown Los
Angeles, that provides city arts and entertainment guides on the Internet. It is
not yet publicly traded, but is planning to do so soon.
Wanting to capitalize on the next hot Internet stock, she picked up the phone
and asked her discount broker to buy CTYS. She didn't catch the name of
the firm, but heard the ticker symbol.
''I had seen how the (stock of) Internet companies shoot way up and I
thought this may be a way to make money,'' said Goodrow, of Simi Valley
northwest of Los Angeles, who started investing two weeks ago. ''With the
little I have in savings, I better do something with it.''
But in a costly case of mistaken identity, Goodrow ended up buying the
wrong stock. Instead of CitySearch, she got Cityscape Financial Corp. in
Elmsford, N.Y., a company going bankrupt.
Other investors likely made the same mistake. The stock of Cityscape rose
as high as 17 cents July 21 from 5 cents in the beginning of July, on volume
more than 10 times its monthly average. It closed at 7 cents Monday as
interest in the stock subsided.
''People don't do their research,'' said Larry Wien, a principal at Wien
Securities in Jersey City, N.J., which handles Cityscape shares. Interest ''has
abated quite a bit since the news came out'' that investors were buying
Cityscape, not CitySearch.
Cityscape is not the only company to benefit from stock-market confusion,
just the latest. In June, when AT&T announced it was buying
Tele-Communications Inc., investors rushed to buy TCII. Unfortunately,
that's the ticker symbol for TCI International, not Tele-Communications Inc.
(TCOMA).
In Goodrow's case, she didn't carefully listen to the TV report on CitySearch
before buying 1,000 shares of CTYS for 14 cents July 21 and another 1,000
shares for 23 cents the following day.
When Goodrow asked her discount broker for CTYS, her broker asked if
the stock she wanted was Cityscape Financial. Since she didn't know the
name of the company, she asked the broker if Cityscape had anything to do
with the Internet. The broker didn't know.
''You don't have any other CTYS?'' Goodrow said she asked. ''Will
(Nasdaq) ever have any other (company trading under) CTYS?''
No, the broker replied to both questions, according to Goodrow. So
Goodrow bought the stock and recommended it to a friend, who bought
5,000 shares as well.
While it was the wrong company, Goodrow did get the ticker symbol right.
In June, CitySearch filed with the Securities and Exchange Commission to go
public under the ticker symbol CTYS.
At the time of the filing, Cityscape was using CTYS, but Nasdaq can take
the symbol of a pink sheet or OTC Bulletin Board company, where firms are
listed with no minimum requirements, and give that symbol to another
company to be listed on the Nasdaq National or SmallCap markets,
according to Nasdaq spokesman Mike Shokouhi.
Cityscape was kicked off the SmallCap Market in May for not meeting
minimum Nasdaq requirements. The mortgage lender is now listed on the
Bulletin Board.
While Nasdaq generally switches over the symbol the day before the listing,
it hastened up the procedure for Cityscape to avoid further confusion. On
Monday, Cityscape started trading under CYYS.
All of which doesn't help Goodrow, who at least is taking her loss in stride.
''I've learned a valuable lesson,'' she said. |
