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Microcap & Penny Stocks : Bid.com International (BIDS) -- Ignore unavailable to you. Want to Upgrade?

To: Sulayman who wrote (25420)	4/24/1999 5:38:00 PM
From: Instock	Respond to of 37507

Bid.Com chairman bulks up on security Paul Godin threatened after stock plummeted Saturday, April 24, 1999 MARK EVANS Technology Reporter Paul Godin, Bid.Com International Inc.'s chairman and chief executive officer, has been forced to hire a security firm after receiving threats -- a stark contrast to the positive reception he expected this week after the Canadian on-line auction house started to trade on the Nasdaq Stock Market. The need for protection comes in the wake of the sharp decline of Bid.Com's stock this week. Rather than climbing on its Nasdaq listing Tuesday, the stock fell and the decline then gained momentum a day later when the company's underwriter, Yorkton Securities Inc., downgraded its shares. "What's happened to us this week, I can pretty much say is unexpected," Mr. Godin said yesterday during an interview. The fervor surrounding Mississauga-based Bid.Com reflects the dark side of Internet-mania that few investors seem to realize or care about: The reality that these stocks can tumble as fast as they rocket upward. In the eye of the storm is a research report written by Mark Pavan, an analyst with Yorkton, which has helped Bid.Com raise almost $30-million through three private placements. On Wednesday, Mr. Pavan shocked the market by issuing a report that downgraded Bid.Com to an "underperform" from a "speculative buy." It was a rare move by an analyst whose firm is the underwriter. It also is an uncommon rating in a market where most analysts put a "hold" rating on a stock even if they believe it's a "sell" to preserve the relationship with the company in question. Mr. Godin, whose company has been the darling of investors this year, said he was shocked by Mr. Pavan's decision because Bid.Com never had an opportunity to talk about the report with Mr. Pavan before it was published. "I was stunned," he said yesterday. "The statements contained within the report hadn't been discussed with management and we were appalled something like this could be published before even basic fact checking." Mr. Pavan said he tried to solicit information from the company. Mr. Godin's disappointment pales in comparison to the rage of many retail investors who saw Bid.Com's shares drop to a low of $8.50 on Thursday after starting the week at $27.70 on the Toronto Stock Exchange. It rose $2.05 to $14.50 yesterday. Mr. Godin said "99 per cent" of investor outrage has been directed at Yorkton and Mr. Pavan, who has also been the subject of threats. In the wake of Yorkton's downgrade, Mr. Godin said Bid.Com is considering the use of other investment firms to raise capital and help with its acquisition strategy. "The cat's out of the bag, you can't take it back," he said, adding the company expects to receive analyst coverage from several U.S. firms soon. With Bid.Com and many investors subjecting him to bitter criticism, Mr. Pavan stands by the rating, pointing out his report is based on the information made available by Bid.Com and comparable valuations of on-line rivals such as Ubid Inc. of Elk Grove Village, Ill., and Onsale Inc. of Menlo Park, Calif. "It's a difficult decision for an underwriter to write a negative report on a company," Mr. Pavan said. "However, research has to maintain its independence and integrity from the corporate finance group and, at the end of the day, an analyst has to publish what he believes and what the numbers are telling him." Mr. Pavan said this isn't the first time he's downgraded a stock that Yorkton has underwritten. Last year, he downgraded SLM Software Inc. to an "underperform" because of concerns about how it recognized revenue. Although SLM's management wouldn't speak with Mr. Pavan for nearly a year, he said the company recently revised its accounting methods and the relationship with Yorkton has been restored. After Mr. Pavan's rating downgrade, SLM shares traded between $3.90 and $6.90 before climbing to a high of $7.75 on the TSE last month.