Remember the DotComGuy from Texas who changed his name and lived inside his house entirely off purchases he made online for an entire year to prove to the world that eCommerce was for real?
Well, now meet SearchGuy, or actually SearchGuy.com.
SearchGuy.com is not the name of a person, but it is a company that recently went public through a reverse merger with a public shell. The company is located in Mountain View, CA. The CEO is Leonard Ratchinsky.
Leonard is fond of writing press releases. I think he writes them himself. You can read his latest press releases at Yahoo! Finance.
Here’s a guy who founded his company in 2001 and takes it public in May 2004. His “Letter to Shareholders Regarding IPO” claims that the company has low overhead and no debt. I can’t find any mention of how many employees SearchGuy.com has, or how much revenue, if any. The company timeline indicates that in 2004 the company “took on a full-time development team” (I’m guessing that means at least 2 people).
From the historic chart at Yahoo you can see that SearchGuy.com stock has been a roller coaster. On June 9th the stock was priced at $0.75 per share. On June 10th it fell to $0.02 per share. And on July 2nd, it was back up at $0.70 per share.
Yahoo Finance doesn’t show me the average daily share volume and total outstanding shares so I can’t calculate the market cap of SearchGuy.com. I also don’t know what percentage of the company Leonard owns.
Leonard is now the CEO of a publicly traded search engine company. If people don’t look too closely into this company and blindly take the advice of message board posts like this one that call SearchGuy.com a great search engine company and a good investment, then SearchGuy.com might have a very bright future.
Or, if Leonard really knows how to execute on a business model that has been good to so many large and small search engine companies before him, he could build a real company here.
While I wouldn’t invest in this kind of a startup until I can see revenue growth and profits, I actually really like the maverick approach Leonard is trying. It’s the same approach Iomega founder David Bailey used to take Ceristar public in 2003. I like the reasons David gave for doing it this way, even though it doesn’t seem to have panned out based on Ceristar’s latest stock chart.
Leonard is pursuing the American Dream. He is running a publicly traded search engine company in the heart of Silicon Valley. Rather than seeking angel funding or venture capital (or maybe he sought it but couldn’t get it) he goes public with a very immature company through a reverse merger with a public shell, and now he’s in business. In the last few days, according to Alexa, his site has actually gotten a good deal of traffic.
A recent Deseret News article discussed the fact that many companies that go public through reverse mergers fail to report and therefore get in trouble with the SEC, and that the SEC is trying to make it more difficult through regulations for small private companies to go public in this fashion.
I’m going to keep my eye on SearchGuy.com. If it can work for Leonard, perhaps it can work for other entrepreneurs as well, as long as the SEC doesn’t make it too hard to pull this off.