TokyoMex Makes the WSJ.
November 4, 1998
Joe Park Is Undeniably
An Internet-Trading
Star
By JOHN R. EMSHWILLER
Staff Reporter of THE WALL STREET JOURNAL
Fans say he can make them money. Detractors say he's
scurrilous. But call him what you will, former burrito
merchant Joe Park has undeniably become an Internet
stock-trading star.
Hundreds routinely follow his
online postings, made using the
moniker TokyoMex. His Web
site, Tokyo Joe's Cafe
(www.TokyoJoe.com), has become one of the most
popular stock-chat message boards in cyberspace.
Investors pay him about $500 a year for private access
to his stock-trading strategies. And a number of small
companies have been feeling his clout.
Earlier this year, Rentech Inc., a
small Denver energy and
petrochemical company, received a
call from Mr. Park. He said he and
his online followers would be
buying a million Rentech shares,
recalls Mark Koenig, who handles
investor relations for the firm. The
next day, more than 1.9 million
Rentech shares traded on the Nasdaq
Stock Market, about six times its
normal volume. The stock's price leaped nearly 50%,
to $1.44 a share.
TokyoMex then called back. "He said, 'You need to
put out a news release to keep the stock going,' " says
Mr. Koenig, who adds that the company rejected that
request. Tuesday, Rentech closed at $1.21875. Mr.
Park says he merely wanted Rentech to explain in a
news release why it was such a good company.
Internet Gurus
The rise of Mr. Park illustrates the opportunities and
difficulties that have come with the marriage of the
Internet and the securities markets. The 39-year-old
New Yorker is part of a new breed of amateur traders
who have been transformed through the
communications power of the Internet into
stock-trading gurus, complete with their own
followers and the ability to move small-company
stocks with the click of a mouse.
The Internet has been fertile
ground for those with some
stock-picking ability -- or at least
the ability to make people think
they have it. But it can also
resemble an ethical quagmire,
where it's hard to separate truth
from fiction, or manipulation.
The U.S. Securities and Exchange
Commission is so concerned
about potential online-investing
abuses that it has set up a
cyberspace-surveillance unit to
catch illegal activities. Last week,
for example, the SEC charged 44
companies and individuals with
illegally touting small-company
stocks on the Internet.
Mr. Park grew up in Seoul, South
Korea, has been a lawyer in
Tokyo, a real-estate investor in Seattle and owner of
Tokyo Joe's Classic Burrito restaurant in Manhattan.
He says he dabbled in stocks for years through
brokerage firms, but then in late 1995 discovered
Internet chat boards and a new life. Some of his early
stock picks turned out to be winners, and he began to
gather a following.
At Silicon Investor (www.techstocks.com), one of the
Internet's most popular stock-chat operations, more
than 1,100 people have "PeopleMarked" TokyoMex
so that they will know when he posts a message. The
next most-followed person has about 900. In
addition, more than 30,000 messages have been
posted by Mr. Park and others on his Tokyo Joe's Cafe
site since it was opened in March, making it among
the 20 most-visited locations of about 2,500 on
Silicon Investor, says Jill McKinney, administrator of
the stock-chat service.
Societe Anonym
Mr. Park says his Web site for paying subscribers,
called Societe Anonym, has about 220 members, from
as far away as Indonesia and Saudi Arabia. (Earlier
this year it had 450, but Mr. Park doubled the
membership fee.) Subscribers get access to his
nonpublic messages. He says he chose the group's
name because, for the most part, "I don't know these
people."
And vice versa. A recent e-mail message to Mr. Park
from a Societe member in Sweden said, "I don't even
know your real name and I am sending you money,
such is the craziness that we have come to."
But there is method in this madness. According to an
early mission statement, Societe Anonym was created
to provide group buying power for "blitzkrieg, quick
in and quick out" stock trading. "We only pick stocks
that are sensitive to volume and momentum. It is easy
to trigger the momentum," this document says.
Dale Weaver, a civil-engineering technician and
Societe Anonym member from Fredericksburg, Va.,
says that for much of this year he has been averaging
about $2,000 a week in profits with the help of Mr.
Park's tips. "TokyoMex has to be the ultimate 'day
trader,' " or short-term stock speculator, Mr. Weaver
says.
'Pumping and Dumping'
But Gary Swancey, a former heating contractor and
Internet stock player from Stockbridge, Ga., says Mr.
Park and others have used their followers like "sheep"
to push up the price of a small-company stock, then
quickly sell for a profit, a practice called "pumping
and dumping."
Mr. Park readily acknowledges "some conflicts of
interest where I was pushing stocks I owned" and then
"reaped most of the benefits" when followers bought
in. "That wasn't fair," he concedes. Now, he adds, he
generally tells Societe Anonym about his buying plans
at the time he executes the transactions. He also says
he holds stocks longer term and focuses more on
larger-company stocks.
In early April, Mr. Park recommended the stock of
800 Travel Systems Inc., a Tampa, Fla., travel agency.
The stock's price rose within the next several days to
$10 from about $3 on Nasdaq.
In one Internet message, Mr. Park wrote: "I spoke
with CEO,,board meeting on Wed,,,will go full
web...imagine what it will do to the stock..." This was
a reference to 800 Travel shifting its sales operations
fully over to the Internet. For much of this year,
companies involved in Internet commerce have been
hot stock plays.
Mark Mastrini, 800 Travel's president and chief
executive, acknowledges having talked to Mr. Park
but says he never spoke of any plans to sell only over
the Internet. Mr. Park says the conversation occurred.
A Field Trip
In June, a little Boca Raton, Fla., cigar, food and
skin-care company called DCGR International
Holdings Inc. paid Mr. Park's expenses to come to its
headquarters in hopes he would put out a favorable
word about the firm.
He did, and the stock rose on heavy volume but then
fell back. DCGR president Don Platten says he now
assumes Mr. Park is a "hype and dump guy" and
regrets having courted him. Mr. Park says he sold his
DCGR shares after roughly doubling his money.
Eventually, he adds, "penny stocks always go down.
That's why they are pennies."
Each trading day, Mr. Park sits in his Manhattan
apartment in front of two computers loaded with
sophisticated stock-tracking software. Business news
blares on a TV. While puffing on Marlboros and
sipping orange juice, Mr. Park receives and sends
dozens of e-mail messages a day and executes orders
electronically for his own account.
He can be alternately tender and testy. When a Societe
member died recently, Mr. Park sent out a eulogy
wishing "him a bon voyage." But at another moment,
he complains to members about having "to hold every
one's ... hands all day."
During the recent market turmoil, Mr. Park has, like
almost everyone else, been trying to hold his head
above water. He says the downturn has trimmed his
personal trading profits this year to under $500,000
from a high of more than $600,000. He adds that he
is still far above the $22,000 he started with in
January. |
