Internet Update
Dateline: 09/20/99
Regional Cablesystems was a relatively unknown stock until Thursday when it made the news as the first cable company in Canada to sell wholesale Internet access to another ISP, and not just any ISP but Canada's third-largest ISP - AOL Canada. AOL will launch its cable Internet service this fall in the tiny town of Sturgeon Falls, Ontario (population 6000).
Two days earlier, the major cable companies, Rogers and Shaw, both of which provide the @Home Internet access service, said it was not feasible to provide AOL access until a number of complex technical issues have been resolved. Regional Cablesystems is itself, not an Internet Service Provider, but has tested the idea with two independent ISPs in Timmins, Ontario. They encountered no problems and company CEO Brendan Paddick says the bleatings of the majors are merely excuses to protect their monopoly position.
Not surprisingly, Regional shares soared 11% on the news Thursday, but dropped back a bit on Friday. The stock had been declining earlier in the week.
Meanwhile, the CRTC ruled on Tuesday that cable companies must allow independent ISPs to access their cable networks and at a 25% discount to boot. Cable mogul Ted Rogers blasted the decision Thursday saying "You hate to be bludgeoned into something. We have a fear that we're not talking about a good business opportunity." The cable companies have 90 days to start providing access.
The CRTC ruling dealt a negative blow to all cable company stocks with Shaw Communications faring particularly poorly, dropping 13% for the week.
But Ted Rogers is crying crocodile tears. He has parlayed himself into one of Canada's few billionaires using the exclusive monopoly privileges given him by government. Rogers has built itself a reputation as a particularly arrogant company in the cable business with its negative billing tactics of a few years ago, it's vociferous opposition to all competition., and its introduction of discount pricing for new customers without offering the savings to existing customers. He who profits by government privilege will suffer by its bite as well.
What we need is an end to monopoly privilege - a free competitive market in cable services. And that is coming. The telcos are agitating to be able to provide cable service and the cable companies to provide telephone service. The sooner this happens the better. The big winner will be the consumer.
Regional Cablesystems has shown that a small company can take on the giants. Here's a tip of the hat to you, Regional Cablesystems. May your association with AOL prove to be long and profitable. (Regional Cablesystems is our profiled Internet stock this week.)
For more on this, check out Tiny cable firm gives boost to AOL, a report in the Sept. 17th National Post.
Click on the title above for this week's Movers & Shakers table.
We added one new stock to our main index, the Canadian Internet Stock Average, and relisted Innofone which we had delisted last week on our Yankee Index. There are now a total of 90 stocks on our lists. Of these, only 8 were double digit advancers this week. 24 were large decliners. A shaky market, to be sure.
The big mover was Innofone, which had been delisted from the OTC BB for failure to file proper documents. It is now being traded as an other OTC stock and jumped 44% to $1.00. It is hard to find out much info about exactly where this stock is being traded. E-trade lists the exchange as "unknown". The OTC BB website lists it under "all other OTC issues" but not under OTCBB issues.
The most interesting of the advancing stocks is Travelbyus.com which gained another 26% this past week. It has been gaining steadily for the last 5 weeks and is up 235% from its price of $0.59 on Aug. 13. Travelbyus.com is the former LatinGold and is now developing its online travel business.
Sikaman Gold is now in its second consecutive week of double digit gains. But Stox.com, which had been moving up steadily for three weeks, took a breather and declined 16% this week.
On the negative side we have Planet411.com into its second week of major declines. The company is launching city based portal websites and their first site, Montreal, is well under way.
ICrystal is also into a second week of double digit drops but the big loser this week is Topclick.com, into its fifth consecutive week of major declines. Ouch! (Aren't you glad you don't own any!)
We added one stock, Regional Cablesystems, to our CISA list this week and we added Innofone back into our Yankee Index, even though we're not sure what exchange it is being traded on. See above for more on this.
Canadian Internet Stock
Index
Metamorphosis Index
Yankee Index
Our profile this week this week is Regional Cablesystems. We have also converted our profiles of Rogers Communications and Microforum from July 12 into our Profile format. They're in the list below with our Previous Profiles. That makes 14 profiles completed so far.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
E-mail me!
09/18/99 - Book
Review: Krash
We look at Jonathan Chevreau & Stephen Gadsden's new book
which predicts a Y2K induced stock market crash.
09/13/99 - Internet
Update: Stox.com Profiled
Along with our Movers & Shakers list and updates to our
Internet indices, we profile Stox.com.
09/10/99 - Bear
Hunting Season
October approaches and some folks are getting edgy. Are we
heading for another October debacle like 1929 and 1987?
09/08//99 - Treasure
on Your Bookshelf
Got some dusty tomes on your bookshelf? They may be worth some
cool cash!
Disclosure: The author may own shares in some of the securities listed.
Schedule Changes: I've been doing articles on Mondays, Wednesdays and Fridays, but will be shifting that to Mondays, Thursdays and Saturdays as a new commitment ties me up Thursday evenings and my wife and I like to take advantage of cheap movie nights on Tuesdays.
Additonally, I'm looking at beefing up a neglected area - namely coming events. If you check out the Events Calendar you'll find it fairly filled up for this month, but navigating it is a bother. So I'm thinking of doing a weekly Events Page to bring the upcoming events into focus. Globefund has decided to drop their Advisors Page which provided a calendar of speaking engagements hosted by various investment advisors. I'd like to take up the slack left by Globefund's departure from the field, so if you want to publicize one of your upcoming events, drop me a line.
Currently reading: I also recently received a review copy of Paul Lermitte's Allowances, Dollars and Sense: A Proven System for Teaching Your Kids About Money. That may take a few weeks to get to. But you may want to check out his new Making Allowances website in the meantime. It is a superb site for kids based on Paul's book.
Also I recently received a letter from someone who's company is now engaged in a lawsuit against UCC Total Home, the company I wrote about here in June. Seems there's also a class action lawsuit against the company. I'll be doing a follow-up on that article as a result of this new information.
This week I'll be doing a Site of the Month profile on Thursday and I haven't decided on Saturday's article yet. I may take the day off. I've got a lot of backlogged work that needs attention.