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, 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, 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 , Edgar Online , and .

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

In February, 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 [email protected].

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