RealTime IT News

Down on Grove Street

Someone recently compared the growing list of fly-by-night Web incubators to a group of Elvis impersonators. Truer words were never spoken. But one such start-up who slapped on the moniker, hoping to add a little giddy-up to its stock price, has leapt from the frying pan and into the fire.

Most have heard of Jersey-based CyberShop.com, who's been hanging around since the mid-90s and once boasted a pretty promising future. The e-tailer's timing couldn't have been better as, back then, people were wildly intrigued by the concept of a cyber-mall.

Smarter than your average cookie, the company wasted no time in throwing together its new economy business model in late 1997, preparing for its whirlwind initial public offering due out early the following year. To give new investors a point of reference here, theglobe.com hit the new issues market in late 1998 - nearly eight months following CyberShop's (CYSP) debut.

The company was founded way back when AOL and the WWW were still synonymous. Dusting off the old prospectus gives many neophyte Web surfers a fun peek at just how newfangled all this World Wide Web stuff was.

The online retailing model provides CyberShop with virtually unlimited online shelf space and the ability to reach a geographically unlimited consumer base, without the costs associated with constructing traditional retail stores and distributing mail-order catalogs.

Ah, the days when we were young and foolish. With a scant million dollars in revenue and nearly twice that in losses, CyberShop rolled up its sleeves to find an underwriter hiding in the Big Apple's back alleyways who'd float such a risky venture. Out popped struggling C.E. Unterberg, best known for introducing a basket of winners that include Beyond.com , Edgar Online , and musicmaker.com .

Sweaty palms gave way to howls of excitement, as shares of CyberShop nearly doubled its offering price within days, while cash-needy start-ups everywhere tuned in to watch the spectacle. But, for those who tuned out early, the biggest spectacle was yet to come.

An e-tailing catastrophe hit Internet stocks late last year when grumpy investors declared no more free lunch, and shares of CyberShop were promptly taken behind the woodshed. But company execs saw light at the end of the tunnel if only they could shed an e-tailing skin for something even sexier.

In February, CyberShop.com shut the doors on its Internet retailing biz and announced plans to undergo a dramatic makeover. The company sent half its workers packing and proudly unveiled its brand-spanking new Grove Street Ventures B2B incubator. And to punctuate new beginnings, the company name and ticker symbol would be changed to the forgettable GSV, Inc. .

It wouldn't be smooth sailing for the ICGE wannabe. For one thing, the cupboard was conspicuously bare, save for the pocket change collected from selling its e-tailing operations. And as one observer pointed to, how's one failed entrepreneur going to tell another how to run their business? Touche.

The proof was in the pudding, but after Grove's first incubatee went the way of the Dodo, the bottom fell out of the stock price like an old rusty bucket. Shareholder lawsuits piled on, and CyberGroveShopStreet sank to its 52-week low of $0.50. Next week, the Nasdaq will add insult to injury, sending a snail mail letter advising the company that it will have to move its things to the OTCBB. And Grove will become just another dead-end street in cyberspace.

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