By Sally Watson, 1 February 1999 17:12
NEWS The US Securities and Exchange Commission (SEC) has imposed a two-week trading suspension on six Internet companies. Five of the companies have ties with stock promoter, Peter Tosto, who was barred from the brokerage industry last year and ordered to pay £1.1m in fines for breaking securities laws. In an unrelated action, the SEC has also suspended trading in USA Talks.com, a Californian long-distance telephone company. Shares in the company have soared 300 per cent this year, giving the firm a total value of more then $1bn. The SEC said trading has been halted because of questions surrounding the accuracy and adequacy of information about the company. All six companies trade on the OTC Bulletin Board - a small-capitalisation market - which requires less demanding listing details than larger markets like Nasdaq. Meanwhile, at the World Economic Forum in Switzerland, chairman and CEO of Microsoft, Bill Gates said is advising friends against investing in Internet companies. Gates characterised Internet stocks as monumentally risky and claimed all technology shares are highly overvalued. In a surprising admission, the billionaire said the pace of change in the technology industry means it is impossible to predict future earnings, and investors are safer with companies like Disney and Coca-Cola.
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