By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
In the 13 years since he moved to Dallas, Wettreich has bought and shut down businesses, shuffled millions of dollars in securities, drawn suspicion from two federal agencies, and thrown people out of work.
"He's the most ruthless businessman I've ever met," says Lila Gill, a private investigator who researched Wettreich's past for Golden Triangle Royalty &Oil, a publicly traded Texas company Wettreich once threatened with a hostile takeover.
A former motorcycle-parts dealer, Wettreich now runs Camelot Corporation, a publicly traded holding company riding the Internet tidal wave. He dismisses the lawsuits, angry partners, and jobless Americans he has left behind. It's not his history of closing businesses that matters, scolds Wettreich; it's the value of shares in Camelot--today. One can sum up his credo like this: "It's the stock price, stupid!"
Wettreich's philosophy is evident in the framed trophies in the windowless conference room at his company's far North Dallas headquarters: four small newspaper clippings from the business section of The Dallas Morning News. The stories chronicle the glorious four-day period in late August when Camelot's stock became the second-most active on the U.S. composite trading index, soaring from $1.97 to $7.03 per share.
The recent slump in high-tech stocks has knocked Camelot back down to $2.75, but that's still impressive for a company that has recorded three straight unprofitable years. It's also multiplied the value of the Wettreich family's beneficially controlled stock holdings to a heady $20.7 million.
None of it has happened by accident. Wettreich has boosted his company's market value by tirelessly touting its showcase product: a computer-software program called Digiphone.
Digiphone is designed to allow Internet users to talk to each other long-distance for only the cost of Internet service. The software wasn't even available for sale until September, but during the months before its release, Wettreich had helped promote it among penny-stock mavens through the computer online service Prodigy as well as on a World Wide Web site.
In Dallas, Wettreich conducted dog-and-pony shows throughout 1995 for the financial press and potential investors. Interest mounted with the news--also touted by Wettreich--that a member of the legendary Hunt clan, H.L. Hunt grandson Clark Hunt, participated in a $1.2 million private placement of Camelot stock.
Camelot hit it really big that week last August because CNBC financial tipman Dan Dorfman--recently sullied by reports of a federal probe into his ties to stock promoters--predicted the company's annual revenues would skyrocket from $1.18 million to as much as $100 million, estimates that even Wettreich had to acknowledge were "pure speculation."
In the past six months, the hype has helped Wettreich's unprofitable company raise more than $7 million through public stock offerings and private placements.
Today, Camelot seems to stand on the edge of the high-tech boom, in control of a sexy new software product and a burgeoning chain of "Mr. CD-ROM" retail software stores; though Camelot operates only five Dallas locations that have been open four months, Wettreich projects an expansion to 100 franchise stores across the country by the end of 1996.
What's uncertain is whether Digiphone will catch on any better than the video telephone among consumers. And what's not generally known among those dreaming about Camelot are the past business failures of their English knight in shining armor.
"I don't want to rehash old, irrelevant information," says Danny Wettreich. The CEO of Camelot Corporation has parked his large, pinstripe-suited frame in an upholstered chair in the company conference room.
He has a similar response when asked about practically anything more than two years in the past. "I must say that all this is old history and totally irrelevant to our present situation. Our stockholders are very pleased with our performances."
Wettreich prefers to talk about the brilliant strategy that has made his company a market darling. In addition to selling a hot product through giant retailers like CompUSA and Best Buy, Wettreich boasts, Camelot Corporation is creating a vertical niche for itself by selling Digiphone on the shelves of its own Mr. CD-ROM stores.
Says Larry Boyd, a Collin County lawyer who sued Camelot and its chairman, "They are clearly in the business of trying to help people get excited about their stock. What is annoying to me is that they never have any [net] income."
With Wettreich, there is often more--and less--than meets the eye.
The "management biographies" section in Camelot Corp.'s 1995 annual report sums up the CEO's British business career succinctly: "Mr. Wettreich was an executive with two London, England, merchant banks in the mid-1970s. Subsequently he was the owner-manager of a private distribution company, and thereafter chief financial officer of a $60 million retailer listed on the London Stock Exchange."
In truth, Wettreich's early years were considerably more colorful than that summary suggests.
After earning his degree in business services during the early 1970s from the Polytechnic School of London--an institution one tier below a full-fledged British university--Wettreich worked for two years in the corporate finance department of two investment banking houses, Hambros Bank and Charterhouse.
Wettreich launched Zara Securities Group, a business he named after his wife, Zara, who came from a wealthy family. The holding company traded in spare motorcycle parts and invested in real estate. By 1980, Wettreich had taken a job as chief financial officer of Bambers Stores, PLC--his father-in-law's company. (He sold or shut down Zara's holdings over the next three years.)