I was wondering what that odd caller id was: www.luvoo.com. Chuck Jaffe from MarketWatch picked up the phone when the call rang into his residence. And it was Carmen Electra (her pre-recorded voice, but still).

She was pitching online dating, but Jaffe thought it notable that she'd mentioned www.luvoo.com's stock was publicly traded. He followed the trail to the web site, where, he says, the "current focus seems to be on its stock; the most prominent feature is a bad head shot of Electra over the words 'Newly Publicly Traded!'"

It seems pretty obvious that Carmen's main goal was not to get Jaffe and myself (both happily married, just for the record) to find each other via the terribly-designed site, but for us to find a quick money-making scheme.

Jaffe goes in-depth and highlights Luvoo.com (LVTI, currently down 12.5 cents on the day to 27.5 cents) as a "stupid investment of the week." Warning flags include daily press releases since the June 9 IPO (most frighteningly, with the CEO talking about how honored he is to have been featured on sites like IPOMovers, "paid marketing conduits"); the lack of any discussion of a business model, or balance sheet; and the fact that the numbers trumpeted in press releases are rather amorphous and without any basis -- for instance, the fact that Carmen's endorsement caused a 400% jump in subscriptions (400% of what? and are any of those monetizable?). There was no press release announcing how the Pauly Shore endorsement affected the company's prospects (licking the bottom of the celebrity endorsement salsa bowl, guys?).

It's a good reminder that stocks shouldn't be evaluated on the basis of the company's celebrity pitch-people, but by the quality of their financial statements. And having a sexy voice on the other end of the phone is likely as much of a red flag as a disappearing business model.

Carmen Electra pitching stupid investments? originally appeared on BloggingStocks on Fri, 23 Jun 2006 13:18:00 EST. Please see our terms for use of feeds.