Global-e a greenhorn of e-commerce

By ROD ORAM

Global-e Investments, the company which launched a $US1 billion ($2 billion) issue of prize bonds last week, is only a recent convert to e-commerce.

Hoping to cash in on internet stock fever, the company says it will use bond money to build an Auckland-based global internet finance and e-commerce company worth billions of dollars.

Damian Archbold, the American promoter of Global-e, said last week that he had been working on the bonds and e-commerce plan for four years. But company documents show Global-e began serious study of e-commerce only last year.

In earlier versions of its business plan, Global-e had proposed using a website to help service the bond draw. More advanced plans began to shape up only late last year after Global-e hired Argenta Consulting.

Argenta's first task was to organise a strategy workshop on October 27 for Global-e's management and advisers, according to Argenta's contract with the company.

Subsequent steps were designed to flesh out Global-e's e-commerce strategy and demonstrate that the e-commerce concept would be much more valuable - and thus attractive to investors - than the prize draw alone.

Companies around the world are jumping on the e-commerce band- wagon because of the very high valuation investors are placing on such businesses despite the high risks involved.

It is not unusual for companies and executives with no e-commerce experience to jump into the business. Mr Archbold said last week that he had no internet or e-commerce experience but he was good at building a team around him.

For its work up to November 22 forging a strategy on which Global-e hopes to build a multibillion-dollar business, Argenta submitted actual and estimated bills totalling $42,979, excluding GST.

But one person still missing from Global-e's team is a finance director, even though it has started to sell the $US1 billion bond issue.

According to the company's prospectus, it envisages "bringing on board a New Zealand-based chief financial officer in October 2000 and allowing a period of five months before the first acquisition is made in February 2001."