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OT: Fellow CMGIers. Check out MLRE from
Wall Street Whistleblower: At Millionaire.com,
the Web Site of the Rich and Famous
By Gregg
Wirth
Staff Reporter
12/22/98 11:24 AM ET
Want
a Rolls-Royce? Get it on the Internet -- and a
house in Tuscany, too.
Customers with these
desires are what Millionaire.com (MLRE:OTC BB) wants. The
newly public company, formed last week through a merger
of a small private company with a rarely traded
public shell, hopes to become the eBay (EBAY:Nasdaq) of
the upper class. With eBay and other Internet stocks
rallying again this week, Millionaire.com doesn't want to
miss its chance.
Investors already seem to be
buying into the vision, despite a dearth of available
financial information about the company. Millionaire.com
has seen its stock increase more than fivefold in the
first four days of trading. It reached a new high
yesterday of 16, eclipsing Friday's record high of 11 1/2.
It closed Monday at 14, up 4, on volume of 1.4
million shares, before giving up 2 5/8, or 19%, Tuesday
morning to trade at 11 3/8.
Such volume and price
run-ups may not be unusual these days, especially an
Internet stock. However, there are stark differences
between Millionaire.com and other highflying Internet
stocks. Primarily, Millionaire.com is the offspring of a
penny stock and trades on the over-the-counter bulletin
board. This could make liquidity a problem since
bulletin-board stocks tend to be thinly traded and sometimes
difficult to sell, especially if many holders decide to
bail out at once.
Also, the company doesn't
report financial information to the Securities and
Exchange Commission, making a true evaluation of its
financial health difficult.-
The company says it's creating an online commerce
and auction house for luxury goods, including
"fantasy shopping, art, antiques, exotic travel, yachts,
classic autos, real estate, premium cigars, fine dining,
interior design, high-tech electronics, gems,
collectibles, watches and wine." The Web site is expected to be
up and running by Jan. 15.
The company also
owns Millionaire magazine, which is printing its first
issue under new management. It's due at newsstands next
month. In addition, the company has a new
20,000-square-foot auction house in Hilton Head, S.C., scheduled to
open before year's end.
Millionaire.com was
formed in a merger last week after it acquired a public
shell called Charter Investor Relations of North
America, which had traded on the OTC bulletin board under
the ticker CRNA. As part of the merger,
Millionaire.com changed its name from Lifestyle Media and raised
$1 million to do the deal. The company also
established headquarters in Bluffton, S.C.
Lifestyle
Media, previous publisher of Millionaire magazine, was
acquired by Robert "Rusty" White shortly before the merger
into the public shell. White founded the Robb Report,
a magazine for the affluent, in 1968, then sold it
in 1983. He now is heading up Millionaire.com.
Millionaire.com recently purchased some good press through one of
those paid stock-touting Web sites. Millionaire.com
issued 50,000 shares of restricted stock, now worth
roughly $700,000, to Small Cap Journal for mention as a
feature company on its Web site. Small Cap Journal is
operated by Fortune Marketing & Capital Consultants, which
has been retained as Millionaire.com's investor- and
media-relations firm.
Steve Samblis, Fortune Marketing's
president, says Millionaire.com will cross-market its Web
site, magazine and auction house to maximize revenue.
The revenue will initially come from advertising, but
eventually will flow from the sale of assets, such as wine,
cigars and art, that could be auctioned as well, Samblis
says. "I think we will redefine how you go after these
markets," he adds.
Laughing off the inevitable
question of whether wealthy sophisticates will really sit
at their computers and guide a mouse to buy a
Rolls-Royce, Samblis says, "Well, [Rolls-Royces] will be
available."
There are neither revenue nor earnings
projections available, Samblis says, adding that the company
wants to be judged on its performance since it's a new
venture.- 1 Reply to tech12_98
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The company has peppered the investing public
with press releases, about one a day since the merger,
including an announcement Monday morning that it inked an
agreement with SGD International for $8 million in
advertising in the magazine.
SGD International is a
trading and bartering company based in New York. Its
president, Jerry Galuten, says he agreed to buy $8 million
in advertising in the magazine over the next three
years. Galuten says he was unaware Millionaire.com even
had a Web site.
Samblis says the company
wants to book the $8 million advertising agreement from
SGD International as a receivable asset, pending
approval from its auditors. That asset could allow
Millionaire.com to qualify for a Nasdaq listing, Samblis
explains.
The company has 6.7 million shares
outstanding (after a 3-for-1 split during the merger), and
about 78% of the shares are in "management's and
friendly hands," according to Samblis.
Investors
commenting on the stock via the online message boards were
ecstatic about the chance to join the upper crust -- if
not in the real world, then online. One message-board
poster on Silicon Investor pointed out the irony that,
presumably, most of the company's shareholders could afford
to buy the stock but none of the products that were
going to be sold on Millionaire.com. Other investors
seemed to be swept up by the climbing stock price. "What
is due diligence?" asked one erstwhile newbie during
Friday's run-up. "Is it too late now to get in?"
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