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Value America: No Bargain - InternetNews.
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Value America: No Bargain

Don't throw good money after bad. Are you listening, Paul Allen? News hit the wires that Value America is the latest in a long line of struggling e-tailers getting a new lease on life, courtesy of you-know-who.

Of course when you have as much money as Allen has, you can just as well hang around your Malibu bungalow making origami sculptures of the Space Needle all day long with a few of those ten thousand dollar bills. Whatever floats your boat.

Do we even know who's on that goofy currency? I think it's actually Bill Gates. Okay, I'm pulling your leg. It's Salmon Portland Chase. Who!? Tuck it away anyhow, cause it just might be a pop question on Who Wants to Be a Millionaire by this time next week.

I thought there might be some quasi-connection between Allen and this Chase character. After all, Paul does own the Trailblazers. Then I come to find out Salmon served a stint as Chief Justice of the Supreme Court, where he fought tooth and nail to get greenbacks declared unconstitutional. Nah, definitely no connection here.

But I digress.

So Value America got a handsome $90 million eleventh hour reprieve. But I think this is little more than a bad investment that's boxed Paul Allen into a long-term investor. And it wouldn't be the first time.

The company was founded by a fellow named Craig Winn. He's one heck of a used car salesman; and he's also a few fries short of a Happy Meal, if you know what I mean. But he convinced one Seattle billionaire to sink $65 million into his vision of a frictionless e-commerce company.

Paul Allen's original investment set off a chain-reaction of additional investors, attracted blue chip talent, and ultimately took the company public this time last year. Just one problem. The inmates were running the asylum. I won't bore you with Winn's long list of eccentricities and overt improprieties, but to say delusions of grandeur would be an understatement.

His legacy is a veritable horror story of mismanagement, arrogance, and greed that single-handedly drove Value America into the ground. The Board finally realized the King wore no clothes, but by then, Value America's name was mud. After Winn got kicked to the curb late last year, the exile has been scrambling to dump insider shares on retail investors to the tune of 60 million buckaroos. Paul Allen lost roughly that much on his investment.

Now Winn rests comfortably in his Mount Vernon-styled mansion. No apologies, no regrets, just laughing all the way to the bank. I'm not calling Winn a crook, but I would if I were an investor in Value America.

These days, the e-tailer has some upper management with ambitious plans. Paul Allen's decision to give it one more go comes just as Value America's coffers are set to run dry. The company's laid off half its workers and has tightened the belt. But does anyone give two hoots? Insider selling and a broken down brand have left Value America little more than a penny stock.

I honestly don't know what Allen sees left in this company. It doesn't even boast decent takeover prospects. Maybe it's time to put his investment out to pasture. Either way, pure-play e-tailers are out of style without yesterday's sex appeal and there's a better chance that leisure suits will make a comeback.

Any questions or comments, love letters or hate mail? As always, feel free to forward them to kblack@internet.com.