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Urging disinvestment
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Here are some sample texts you can post on eToys message boards, or send to the biggest eToys investors directly. Please feel free to combine and rework.
- It seems there's a good case for a shareholder class-action lawsuit against eToys management. In the U.S. you can sue a company's management if they keep making decisions that run counter to sound business judgment--and in this case, it's pretty clear eToys management is acting out of personal motives rather than from any real judgment. Consider: (a) If eToys was judging clearly, why are they holding out against a bunch of activists, including hackers, who have so far gotten almost all the press on their side, which in turn has contributed to the stock slide (which began the day the protests did); and (b) why is eToys not saying what it will do? The reason is it has no idea, because at this point management is just plain angry and hasn't been thinking clearly.
- eToys has been successfully suing an art group, etoy. This has generated huge protests on the net, which have been reported for some time as contributing to the quick eToys stock value loss of 70% (which dates to Nov. 29, the date the first report of the protest was printed).
eToys has not responded to this protest, nor done any of several easy things to cause it to stop. Their mismanagement, which may be due to the personal level to which this has fallen for all concerned, has contributed to the eToys stock fall by failing to stop the destructive protests. This constitutes grounds for an extremely effective class-action lawsuit by eToys stockholders.
Please see http://fnews.yahoo.com/street/99/12/23/wrong_991223.html for news of the financial implications of the protests. Please see http://rtmark.com/etoy for more general information about the protests.
- If you plan to "ride out the storm," you should know that the groundswell of opposition to eToys will not relent even when the situation is resolved, and that the damage to eToys' viability will be very long-lasting no matter what.
- This company of mental giants has opened a can of worms that doesn't seem to be doing anything other than wriggling out of control. Etoys has brought a lawsuit against an older(2-yrs) web based artist community residing at etoy.com . The basis of the suit being a grandmother upset over her grndson seeing a bit of profanity on etoy.com, while looking for Etoys. Now if Etoys was staffed with people competent enough to deserve your investment $, they might have researched links between etoy.com and the "hacker" community, then found a solution that didn't lose anyone $. Now after large amounts of noise being generated by protests and hackers, we're looking at a stock fallout of $4 billion. These are class-action #'s.See for yourself: http://fnews.yahoo.com/street/99/12/23/wrong_991223.html.
It's your money, but be thorough on this one.
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Don't complain to me about my messages, complain to eToys instead (e-mails listed at http://rtmark.com/etoys.html. Neither I nor others like me will relent from expressions of outrage, nor from more serious attacks, until eToys fully backs down.
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Online toy retailer etoys.com (ETYS) has already lost $3.5 billion in
market value thanks to an electronic warfare campaign waged by RTMark.com,
Eviltoy.com, the Toywar resistance network, the Electronic Disturbance Theatre, and many other individuals and groups.
It started early this month when eToys lawyers shut down
etoy.com, a site run by several european artists, which had existed
several years before eToys.com.
On Dec 10, Moore Capital Holdings, one of the largest hedge fund
groups, signficantly cut its holdings in etoys.com.
At noon on Dec 15, Electronic Disturbance Theatre began a
distributed attack against eToys.com that was reported by CNN the day after as having caused an appreciable slowdown in the eToys servers. The attacks continue, with hackers from around the world targeting eToys.com for denial of service attacks and for more direct forms of interference. Protesters have also jammed eToys' incoming telephone switchboards, blocking orders and customer service
calls. Given that eToys faces stiff competition from amazon.com (AMZN), ToysRUS, and other online retailers, the effect could be catastrophic -- particularly while eToys
is incapable of taking telephone orders and taking customer service
calls.
Although eToys' frivolous lawsuit will likely be thrown out of court on
Dec 27, damage to eToys will likely continue long after. Also,
by faltering this season in its only market, eToys has created golden opportunities for its
competitors to build brand and market share at a critical time in the
growth of the Internet.
- eToys stock's recent drop (dating to the November 29 injunction against etoy.com) is especially significant
considering this is by far the busiest time of the year for this Internet
start-up. With the massive publicity surrounding this issue it is quite possible that eToys may not
recover from this fall in value. Of even greater concern is the fact
that eToys relies entirely on the Internet; there is no backup market
in which eToys can make up for any loss to their Internet market share. A potential class-action lawsuit against eToys management by eToys stockholders completes the bleak picture.
- ETYS should have kept its mouth shut--they've agreed to drop their lawsuit if etoy refuses to press any lawsuits. Etoy already has a countersuit, simply to defend their use of the trademark. In yesterday's press release, ETYS has stated that it believes "etoys.com should coexist with etoy.com." That is, they've stated that (a) they were wrong to sue etoy. Past that, they claimed they offered an out-of-court settlement because of public pressure... Not of the kind that RTMark has brought (by, for instance, overloading ETYS servers on Thursday, Dec 16) but rather by all the nice people from the Electronic Frontier Foundation. Therefore, (b) they care what people think, and (c) supporters of etoy are nice people, not cyberterrorists or electro-hippie extremists.
Etoy has already rejected the proposed settlement. Although I don't know what they're going to do, they could sue Etoys under California's tough anti-SLAPP ordinances for an outrageous sum. In that case, RTMark would continue its electronic and information warfare campaigns, digging up dirty laundry on the company and disseminating it, encouraging defection and subversion among etoys employees (an employee who quit ETOYS because the etoy case spoke at an activist rally held after the Dec 27 hearing) and other dirty tricks. Of course, the EFF and other more responsible activists will also create bad press for ETYS. By stating points (a), (b) and (c) in public, ETYS has checkmated itself--it's admitted that it was wrong, that it cares what people think, and that the protestors were reasonable people, not terrorists. They'll have no way to defend themselves from the etoy lawsuit in either the legal system or in the court of public opinion.
Because ETYS has already had its trademark application rejected for Etoys, the last thing they want to do is take it to court, where they might lose rights to their proposed trademark permanently. The best case scenario for ETYS is unconditional surrender before the Jan 10 hearing, paying a multi-million settlement to Etoy. This would be a PR disaster, but it would pale in comparison to the alternative--ETYS stock surrounded by a climate of fear, uncertainty and doubt for months or years.
BTW, any of you guys seen the Dec 29 WSJ interactive article "Toy Retailers Find Investors Unforgiving on Blunders?" It sounds like the cassandras about bad customer service at etoys were right... Although ETYS and the irrepressable bulls will tell you 10% of customers angry is good, just remember that those people are going to tell all their friends. Just do a search for "Etoys" on Deja News and you'll see a lot of unhappy people speaking their mind, giving ETYS the worst kind of word of mouth.
- This stock's a dog.... eToys has no idea how to manage money--pissing off the whole hacker world is not a very good idea, clearly, and shockingly stupid for a company that after all is on the net.... Under U.S. law shareholders can lead a class-action lawsuit against management that willfully and stupidly loses their money--and that's what we've got here. Pretty soon it's going to be necessary to decide whether to join that suit, or to keep losing money....
- Since eToys began its attack of the art group etoy, the eToys share price has fallen below half its former value. The market says that eToys management has failed miserably. Although eToys has finally relented--partially--it has already lost about two-thirds of its pre-attack value. And its failure to fully relinquish its demand for etoy.com leads one to suspect the protests will continue to erode eToys' value.... If eToys management is not profoundly overhauled, investments in eToys will not be safe.
- eToys would not be the first company to be destroyed by the stupidity of its CEO. Don't let that happen to eToys or to your investment dollars. If Toby Lenk cannot fully and completely change course, and satisfy those out to destroy his company, someone should show him the door.
- It is not outsiders who have attacked eToys, generating massive media coverage and the fall of its stock value. It is the Net mainstream that is enraged, and eToys cannot erode this opposition with delaying tactics or huge legal bills. The only way around a continued attack is to promise never to attack etoy.com again. Toby Lenk's ostrich-like style of crisis management will continue to erode eToys' business unless investors and board members show that they want a change.
- eToys has shown great interest in expanding into Europe (its interest in etoy.com is directly related to this expansion). But etoy is much better known in Europe than in America, and as long as eToys does not make amends, eToys hasn't a chance in the European markets.
- eToys has the entire world press against it. If eToys doesn't turn itself around in a more dramatic fashion, the crisis will continue. This conflict could cost eToys its existence.
- Thousands have written letters and emails to eToys
asking why they have waged this senseless battle. A
Swiss television team even travelled to LA to get an answer. But like an ostrich with its head in the sand,
eToys have refused to answer and explain themselves.
eToys: what are you hiding?
- The Brent Spar fiasco showed what a grass roots movement is capable of.
The process against eToy may develop into a Brent Spar of e-commerce. Do you want your shares to have to weather this storm any longer? The principal shareholders must do something to save the enterprise.
- Banning art is bad business.
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