2TheMart Finally Launches Web Site

Irvine-based 2TheMart.com Inc., an online auction company that has seen its stock fluctuate wildly over the past year, finally launched its Web site Monday, five months later than expected.

The company, plagued by three shareholder lawsuits and led by two men with cloudy backgrounds, launched its auction site with a limited selection of products.

In its first day, bidding activity on the site appeared to be minimal. The site was riddled with dead-end links and notices of features “coming soon.”

Company officials could not be reached.

The company’s stock closed at $9.75, down 75 cents a share. With 25.6 million shares outstanding, the company, which has reported no revenues and has not outlined a strategy for attracting traffic, has a market capitalization of $250 million.

Last week, the shares traded at $16.50, but seven weeks ago the stock was at $2.38.

The company first drew attention in January when its stock rocketed from $2 to $50 as 2TheMart promised to launch an online auction that would rival eBay Inc.

But the company missed its target launch dates twice. Later, it was revealed that the company’s founders, Chairman and Chief Executive Steven Rebeil and President Dominic J. Magliarditi, had been denied licenses to run a casino two years ago by the Nevada Gaming Commission. The commission found the men were “not of good character, honesty and integrity” and shouldn’t run a public company.

The commission had found, among other things, that both had lied to investigators of the State Gaming Control Board.

Rebeil and Magliarditi each own about a third of 2TheMart.

In September, three separate shareholder lawsuits charged that the company made misleading statements about the readiness of its online auction.

On at least four occasions from January to March, the company issued press releases stating that its Web site was “currently in its final development,” even though it wasn’t until late May that the company signed a contract with IBM Corp. to begin developing the site, the lawsuits said.

The company has also faced financial as well as legal difficulties. At the end of August, Rebeil said he would lend the company $2 million after its efforts to raise $10 million in private stock had netted just $530,000.

In July, the accounting firm Deloitte & Touche, without explanation, severed its ties with the company.