Mike
Must be the day for "net mania" stories in the WSJ. Here's another one about an SI member with handle of Ga Bard now living in a van down by the river. Anyone remember this guy?
John
Online Trader Gets Humbled
After Ignoring His Own Rule
By JOHN R. EMSHWILLER
Staff Reporter of THE WALL STREET JOURNAL
Less than a year ago, Gary Swancey was riding high on the online stock-trading wave.
Under the moniker Ga Bard (he comes from Georgia
and writes poetry), Mr. Swancey had hundreds of
people following his Internet stock postings. The
46-year-old former heating and air-conditioning
contractor says he had at one point turned a $20,000
stake into some $500,000 worth of securities. He even
did a stint of investor-relations work for a small company called Midland Inc.
These days, Mr. Swancey has largely dropped off the Internet
chat circuit. He says he has had to sell his 5,600-square-foot
home, a rental property and his 1995 black pickup truck to
pay off debts and raise cash. Almost all his money is tied up in
Midland, whose shares -- which were listed on the OTC
Bulletin Board, maintained by Nasdaq, for stocks that don't
qualify for Nasdaq itself -- haven't traded since they were
suspended in August by the U.S. Securities and Exchange
Commission. The SEC has questioned Mr. Swancey and
charged two former Midland officials with securities-law
violations. An SEC official declines to comment.
Though Mr. Swancey says he doesn't believe he did anything
wrong, he concedes, "I made a lot of mistakes."
Mr. Swancey's misadventures are a warning to those seeking
stock-trading riches on the Internet. While offering potentially enormous opportunities for
average investors, the Internet is also a minefield of misinformation and temptation. It is also
a place where relative stock-trading novices such as Mr. Swancey can quickly become
celebrities with influence and followings.
Mr. Swancey was "respected" and "known all over," says Mike Nichols, a former textile
salesman from Clifton, N.J., who became such an Internet trading celebrity under the moniker
Big Dog that he has started his own online investor-relations firm.
Mr. Swancey says he ventured into cyberspace after his
Atlanta-area heating and air-conditioning business went
bust when hoped-for work from the 1996 summer
Olympics didn't materialize. Retreating to his home in
Stockbridge, Ga., he began trolling the Internet. By early
1997, he was trading stocks, using money from his son
and his own savings. "I figured I could make a living," he
says.
Like many Internet players, Mr. Swancey was attracted to small, obscure stocks that are
often volatile. In his first six months, he says he lost $14,000 of the $20,000 initial stake,
mostly by following the advice of others on the Internet. "I got passed around more than a
piece of old Tupperware," he says.
Mr. Swancey says he turned things around by doing his own stock research. His cyberspace
reputation grew. By last year, he had his own Web site, Georgia Bard's Corner. More than
500 people had marked his name so they would know when he posted messages on Silicon
Investor (www.techstocks.com), making him one of the 10 most-followed names on that
popular stock-chat operation.
Mr. Swancey says his budding Internet fame helped trip him up. "I got so busy teaching
people online that I started ignoring my own message," which included never getting too
involved in one stock, he says.
For him, the stock was Dallas-based Midland.
Mr. Swancey says he was attracted by the
company's capital structure, which included
preferred shares that were each convertible at
attractive prices into 35 shares of common.
As part of his research, he flew to Dallas to
interview company officials. He started two
stock-chat Web sites about Midland that
attracted thousands of messages. "I could
quote page numbers of the [company] filings
with the SEC," says Mr. Swancey.
Knowledge, however, didn't necessarily bring
wisdom when it came to evaluating the
company's flaws -- such as its apparent
difficulty deciding what to be when it grew
up. Midland news releases show that since
early 1997 the company was successively
involved in international shipping, wood products, bearings and power transmission,
software, a Las Vegas restaurant and ethanol fuel.
A parade of top executives also passed through. One, Mark Pierce, was sued in December
1997 by the SEC in New York federal court for allegedly trying to manipulate the stock price
of Midland's predecessor company. Mr. Pierce denies wrongdoing in that pending case.
Mr. Swancey says that while such turmoil gave him occasional pause, he kept buying stock.
According to trading records he supplied, he still holds about 10,500 Midland preferred
shares, bought at from $3 to $26 each, between late 1997 and mid-1998.
In June, during a new bout of management turmoil, Mr. Swancey did investor-relations duty
for about six weeks. He and Midland's Mr. Pierce say he wasn't paid. Mr. Swancey says he
took the job because "everybody online was looking to me."
His move won some cyberspace kudos. "You are the right man for the job," said one Internet
posting. "The best thing that could happen right now," said another.
Then the SEC suspended trading, citing concerns over "the accuracy and adequacy" of
information about Midland. Midland's current chairman, Roger Tompkins, says he is trying
to get trading resumed. (On the last day of trading, Midland common stock traded at 32 cents
a share, down from a high of about $2.60 a share last May. Midland preferred shares last
traded at $5.)
In October, the SEC filed a still-pending suit in Tampa, Fla., federal court against Steven A.
King, a Sarasota, Fla., operator of an Internet stock-information Web site and a former
Midland chairman. The suit alleges Mr. King's Internet operation "fraudulently touted"
Midland and four other small companies. Mr. King has denied the charge.
Meanwhile, Mr. Swancey earlier this month resumed doing investor-relations work, including
operating Web sites -- this time for about $50 an hour. So far, he says, he is working for two
small companies, one, an environmental concern called CNH Holdings Co., the other, a video
and general merchandise company called Diamond Entertainment Corp. Mr. Swancey says
his compensation includes stock options with a current market value of about $45,000.
Officials at the companies didn't return phone calls.
Despite his Midland-related woes, Mr. Swancey says he has stayed in the business because
"I have to make a living."
But he offers cautious words to would-be Internet traders: "Trust no one." Anyone who
wants to trade online, he adds, needs the right tools, knowledge and discipline. "It is a
vicious, vicious arena," he says.
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