Irvine Firm’s Stock Soars on Plans for Auction Web Site

An Irvine company that on Wednesday said it plans to launch an auction Web site has seen its stock soar as much as 10 times in price this week, even though the company provided scant details about its operation.

2TheMart.com Inc. on Tuesday purchased San Juan Capistrano-based CD-ROM Yearbook Co. in a move to take advantage of CD-ROM’s access to public markets. A new board of directors was appointed and the company moved to Irvine. On the same day, the stock, which is traded over the counter, jumped from $4.50 to $13 a share.

The stock surged 65%, or $8.50 a share, to $21.50 on Wednesday, making it the 10th-largest percentage gainer in U.S. markets. At one point, the shares traded as high as $50. One week earlier, they closed at $2 a share.

Before the acquisition, stock of CD-ROM Yearbook had been lightly traded. Since the company began trading last March, there were only 19 days in which any activity was recorded. Until recently, a total of just 7,200 shares had exchanged hands at an average price of $3.48.

But on Wednesday, after the company said it would begin “one of the largest and preeminent online auction sites,” a total of 244,200 shares changed hands.

The company said it had received $1.7 million in cash and commitments for an additional $1.5 million to “fund 2TheMart.com’s business plan, acquisitions, strategic alliances and working capital.” But the announcement gave no details of how it would market such a site, which would include live video auctions.

2TheMart.com and CD-ROM Yearbook officials did not return telephone calls.

The $3.2 million in funding is less than one-tenth of 1% of the $8.6-billion market value of EBay Inc., which 2TheMart identified as its primary competitor.

Although the company’s news release said it would launch a person-to-person auction Web site, it also listed as competitors three companies that do not run such auctions.

The company’s Web site currently consists of several advertisements for unrelated Internet services and a notice that a site is “coming soon.”

The name 2TheMart was registered to BLI Enterprises Ltd. in Las Vegas and Dominic J. Magliarditi, 2TheMart.com’s president. Magliarditi would not comment beyond the news release and referred calls to his attorney, who could not be reached. Calls to BLI went unanswered.

Magliarditi is listed as an officer of at least 12 Nevada companies that participate in activities ranging from investment to gambling to real estate development. In 1997, he lost a bid to gain a license to operate a casino in Henderson, Nev.

Neither 2TheMart.com nor CD-ROM Yearbook has filed regulatory reports, according to the Securities and Exchange Commission, but the SEC does not require such filings from companies that are sufficiently small, a spokesman said.

It was unclear how many shares in the company are outstanding, who its major stockholders are or how many employees it has.