October 28, 2004

Rant Declines Sale Proposal

Rant Executives "Blew Off" Sale Inquiry,
Angry Shareholders Complain
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Advocate Charges: Leaders Ought to Have
Heard Out Proposal Before Trashing It
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Kepple Responds: "Think Long Term, Will You?"

by HARRIS SCHWED
Financial Rant

HAMILTON, Bermuda -- Executives with Benjamin Kepple's Daily Rant Inc., an Internet content provider based here, angrily reacted to shareholder complaints about the firm's handling of a potential site sale.

The complaining shareholders in the now privately-held company own just a few percent of the firm's total stock. Burned after the share price plummeted in the wake of the dot-com boom, they held onto their almost-worthless stock in hopes The Rant would eventually be sold or return to the markets as a public entity. Now, they're furious at what they call a "rash and foolish move" which "only benefits management."

"Look, I'm as ready as the next guy to admit I screwed up," said Ira Pflugerpepper, a shareholder from Fearnot, Pa., who initially bought when shares were trading at $0.50. "That said, last time I checked, the managers of a company are supposed to look out for the shareholders, aren't they? And if the shareholders could make anything out of this, why the hell didn't the suits go for it?"

"Now look here -- we're working on building value in this company," chief executive Benjamin Kepple said at a press conference yesterday. "Yes, we got a nice letter that was, at first glance, an apparently serious quasi-spam inquiry regarding the possible sale of our site. We're very flattered. That said, there is no way we're going to have anything to do with it. Even to entertain such things, we need documents, and there were precious little of those along with the proposal in question."

"We know that a few of our investors have been disappointed their ADRs went south in the dot-com boom," Kepple continued, "but we refuse to do anything that could impact the brand in ways other than those set out in our Strategic Plan. Editorial control rests in one party: us. Managerial control rests in one party: us. We are completely and utterly independent. And that's the way it's going to be. End of discussion."

When asked what kind of offer The Rant would consider, Kepple shot back, "Well, more money than you can imagine." When a reporter countered that he could imagine quite a bit, Kepple responded: "No reward is worth that."

Kepple's comments came as embarrassing document disclosures shined some light on The Rant's byzantine equity structure. Kepple, despite having little initial capital, was able to seize control of his firm in 2002 after forcing the share price to plummet to just pennies. He then was able to take it private, cementing the deal. The documents, which a former employee revealed to a reporter, showed the following people and groups were owners of The Rant:

KEY SHAREHOLDERS:

Benjamin Kepple: 17.6 pc

Kepple Provident Fund Scheme Trust: 33.1 pc
(controlled by Kepple)

Insiders/Management: 7.4 pc
(includes CTO Ned Henries, CFO Ted Hamilton, VP Sales/Mktg Quinn Quimbley, and other personnel.)

Shark & Condemnem Co. Inc.: 1.1 pc

Minority Interest: 11.2 pc

The owners of the remaining 29.6 pc are still unclear, a source said, but are thought to include a firm based in the U.S. state of Ohio. Kepple, when asked about the list, declined comment.

However, the conference was not without some news. After persistent questioning, The Rant revealed certain traffic data. Based on the number of total visitors (including repeats), The Rant believes it has achieved levels of traffic comparable to "the average circulation of a very small weekly newspaper."

"Admittedly, it's ... well, you know that scene in 'Superman' where Lex Luthor is describing his plans for California? And he discovers his henchman Otis secretly named a tiny little town in the California desert 'Otisburg'?" Kepple asked.

"Compared to the blogosphere and the media overall, this is kinda like that. But boy! It's still pretty neat."

Posted by Benjamin Kepple at October 28, 2004 08:26 PM | TrackBack
Comments

Count me as one of many disillusioned Rant shareholders. I once thought Kepple was a stand up guy who would do the right thing for the small investor. Boy was I wrong! I will never, never again invest in a Bermuda based company which lies outside the reach of Elliot Spitzer and the S.E.C. The shame of it all is that the Rant had such a beautiful business model through which it was leveraging the toil of its grossly underpaid and marginally talented staff to 1980's technology. This created unique opportunities to bring misinformation to the masses at a fraction of the cost of conventional news sources. The shame of all is that the Rant could have been another Google, in terms of profitablity, if Kepple had kept his eye on the ball and his hands out of our pocketbooks.

Posted by: Swammi in Solon at October 29, 2004 08:39 AM