Reportedly Sells to Underwriter

From Dow Jones News Service

A cable news station reported Friday that up to 23% of beleaguered's revenue consists of purchases made by Waldron & Co., the brokerage that took the Internet retailer public.

It would be highly unusual for Waldron, as the underwriter, to also be the source of such a large share of's revenue, according to the report by MSNBC.

The latest report adds to the controversy over possible manipulation in's stock price. The Securities and Exchange Commission halted trading in the Irvine retailer's stock on Tuesday while it investigates the matter.

The MSNBC report is based on an interview with's chief financial officer, Christine Webster, who declined to say how much the purchases totaled. Present and former employees said Waldron's purchases totaled more than $250,000, MSNBC reported. Chief Executive Robert McNulty was not available to comment Friday afternoon. Earlier, though, he told Dow Jones that his company's first-quarter revenue will exceed Waldron's published estimate of $775,000.

A spokesman for Waldron said its chairman, Cery Perle, would not comment. He said the SEC has not contacted the firm about its purported retail purchases through reported aggregate net revenue of $376,000 from its founding to Oct. 31. On March 17, the company said sales for the fourth quarter ended Jan. 31 exceeded $400,000.

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