I have a tendency to keep track of companies I’ve worked at in the past—to watch their sagas play out. Part of this might be personal “what might have been” interest; part of it’s also that I’ve been fascinated for years by the “who owns what” game of modern American business.
While I’m not sure NetWolves was the most peculiar company I’ve worked at, they were one of the most colorful, from the days of their founding when I’m told they kept booze in the company break room up through their inexplicable habit of hiring and then losing talented technical staff. This was nearly the stuff of legend; the people they’ve fired, laid off or just driven away included one of the sharper CTOs I’ve worked for, a senior network engineer who literally wrote the book—well, at least one well-regarded book—on TCP/IP programming, and even one of the lead programmers on the classic adventure game Wizardry.1 They did keep, for a long time, a self-professed security expert and system architect who spoke of the need to “authentificate” users and urged us to make our code “more flamboyant.” (What, we should put it in a racy red miniskirt?)
NetWolves’ products and services haven’t been bad, but they’ve been, well, the best description might be undistinguished. They’re making firewall and VPN products, managed security suites, and so on. Their solutions—turnkey FreeBSD boxes running a mix of open source software and a proprietary front-end, a simple (and again, proprietary) network management system for monitoring the boxes’ health and connectivity—are functional, but they’re neither groundbreaking nor very elegant. After many years, they found no traction in their market, and since mid-2002—yes, about the time I was laid off—nearly all of their revenue has come from circuit resales. Their last-ditch effort to save themselves that year was to buy the provisioning group of another networking company, ostensibly to let them become a “one-stop shop” providing equipment and service all in one bundle. They saved the company by mortgaging its business model.
Me? At that point, I would have end-of-lifed the “do everything” gateway hardware and focused entirely on the managed offerings, moving the network monitoring system to full compatibility with industry standards and partnering with a hardware vendor. Instead, NetWolves did what they were best at: chasing chimeras.
They lost their major revenue-producing customer and haven’t replaced an appreciable amount of that income, even as they sink more deeply into a high-cost, low-margin market. The cost-cutting measures have taken on an edge of desperation, from more layoffs to consolidating office space to, finally, executives taking salary deferrals. A month or two ago they took out a high-interest loan from a private backer, which suggests they couldn’t get a bank to loan them the money. There are rumors they’ve stopped the direct deposit program, always a bad sign if true. All the while the stock price has slid from “low” to “black pit of despair.”
But that’s where the most interesting thing about the company is, and what’s kept me watching them for way too long: the stock chat boards. See, WOLV has been under $1 for well over a year, and anyone with the brains of a radish knew they were going to be delisted. But it seemed the more dire things got, the more company supporters came out of the woodwork to scream shrill invective at any poster there with the nerve to point out that, in the company’s history, they have never, ever, made good on their announced plans. They wouldn’t hear any of that basher nonsense. Every time another milestone toward delisting was passed, the true believers got more vitriolic about how that was a sure sign they were going to make millions and anyone who said otherwise had a nefarious hidden agenda.
This time Lucy won’t pull the football away, Charlie Brown!
The person who caught the most vitriol was “Justice is Remediation,” who often cut-and-pasted the same messages over and over, usually excerpts from SEC filings, articles about NetWolves or occasionally other posters’ messages. I found this tactic annoying, but it drove some of the company’s supporters nuts. They were sure he had a hidden agenda: a paid basher, a disgruntled ex-employee, a burned investor, somebody with a vendetta against the company. (While the last one might well be true, there was no evidence of other connections.) The funny thing is that JIR’s postings were always well-researched, supported by links, and with the exception of his judgments cast on some other posters,2 generally not even opinions—just facts presented in a “draw your own conclusion” manner. I referred to him a couple times as the board’s fool on the hill: dismissed as a lunatic, but in the final analysis, the one with the clearest view.
This week, WOLV—their ticker symbol—becomes WOLV.PK, demoted to the NASDAQ “pink sheets,” as everyone but the radishes knew was coming. The most diehard pushers there are still at it even now, convinced that even on the pink sheets it’s gonna make ‘em money. To be fair: there are companies that trade off the major exchanges that do well enough by their investors. To be realistic: unless there’s some surprisingly positive news in the company’s quarterly report next week, it’s unlikely they’ll be one of them. Ask not for whom the wolf piddles.
So. Why still care? Honestly, I don’t know. Up until my contract at There, NetWolves was the closest to an internet startup that I’d been at, and it was the first “real” job I didn’t feel like I’d just stumbled into somehow. I got my job at Intermedia through temping there first. Of course, they made me permanent because they liked my work; I just bypassed the interview process. At any rate, despite the complaints I had about NetWolves, I suppose I always had a soft spot in my
head heart for them, and figured that maybe they’d manage to finally pull out a win, instead of eternally snatching defeat from the jaws of victory.
- Why no names? When I was working on the web front interface, I started to add the engineers’ names to the credit box once, and was asked by several of them not to do that: they didn’t want their names actively associated with the product. True story. ↩
- Which is not to say his judgments on other posters were wrong. ↩