A paraphrase of the story, as heard from FVHI investor relations: FVHI went public in December 1996 as an Internet payment company. The houses sponsoring included Lehman and Bear Stearns. Six months later FVHI changed its focus to electronic messaging because the payment business was disappointing: margins were low, and there were too few transactions. |
So FVHI drew up a plan to handle email for large companies. The plan is to provide clients with third-pary, roundtrip email. As an example: a computer company sells a customer a laptop over the Web. FVHI then replies with a thank you, which also suggests additional purchases, say, of an extra battery or a printer at a discount. The customer can then simply click a button or link to approve the transaction: FVHI has the necessary credit info from its client company.
It sounds as if FVHI remains an E-commerce company, though it's looking for a niche not originally defined by the business plan that found initial backing. Apparently Wall Street doesn't like such behavior, as a cursory glance at FVHI's chart will show. Plus, after an October private placement a lot of preferred shares got converted to common, increasing the float and further depressing the stock price.
While IR says it is presently seeking additional capital, I gather the company has revenues, no debt, and cash on hand, though no major clients as yet. But insider ownership is about 38%, I'm told, and I imagine that short of bankruptcy, the bad news is in the price.
If anyone can add details to the story, please do. I may take up a very small speculative position, since the idea of an Internet value play intrigues me.