Peter Spina is not an old-school gold bug. He isn’t a retired geologist. He doesn’t wear brightly colored blazers. When he goes to gold conventions, he is one of the few attendees with tightly cropped blond hair – not thinning gray.
“I’m by far the youngest person at the conventions – except for the models at the company booths,” said Spina, 26, president of Littleton- based Goldseek.com.
Spina, a 2003 Colorado State University graduate, founded his website more than a decade ago from his parents’ Littleton home. His dad, a former Lockheed Martin engineer, sparked his interest in investing.
Goldseek.com now ranks among the most popular websites for gold investors, with average daily traffic of 30,333, according to Alexa.com, which tracks Web traffic.
Through the website and print newsletter, Spina has developed a legion of readers who act on his stock picks – mostly about little-known metals companies such as Madison Minerals Inc. and Buffalo Gold Ltd., both based in Vancouver, British Columbia.
Those two companies saw their share prices soar and trading volumes spike following Spina’s recommendations.
But Spina’s market-moving influence raises ethical and regulatory questions for three reasons: Some companies pay him to tout their prospects; some of them buy advertising on his website; and he owns shares in some of the companies he recommends.
Jon Nadler, a competitor of Spina’s who has worked in the gold industry for decades, said investors should be cautious.
“If I were to look at a website that had banner ads from a company and then a big plug lower down, that would raise some eyebrows,” said Nad ler, whose website is kitco.com. Nadler said his website accepts banner ads but doesn’t tout stocks and doesn’t have paid profiles.
Fred Joseph, the Colorado securities commissioner, said Spina isn’t violating any laws – as long as he tells readers he is being paid for the plugs. “Disclosure is the key,” Joseph said.
Spina said he makes those disclosures. And in one profile reviewed by The Denver Post, Spina did disclose his own holding in a stock he was discussing.
The gold industry, long dominated by middle-aged men with big bank accounts, is attracting new players as the price for the yellow metal has roared back in recent years.
Gold, which hit a low of $255 an ounce in 2001, traded above $730 earlier this year on concerns about inflation and a relatively weak U.S. dollar. It has pulled back since then, with December contracts closing Wednesday at $586.20 an ounce.
D. Stewart Armstrong, chief executive of Carmel, Calif.-based Seacoast Consulting, said Spina has developed a following by attracting readers and offering smart advice.
“People trust what they read on his website and in the newsletter,” said Armstrong, whose company has brokered advertising deals between mining companies and Goldseek.com.
Spina says his overall business will generate $300,000 in revenue this year. That includes Goldseek.com, a sister website Silverseek.com, a newsletter, and brokering private-placements deals between wealthy investors and small companies looking for capital.
Spina acknowledges that his influence in moving stock prices through recommendations could open the door for pump-and-dump schemes. Such schemes involve artificially inflating the price of a stock by touting it to investors, then cashing out before the stock falls.
Spina says he has never done that. He says he discloses to investors if he personally owns a stock he plugs. He says he only accepts advertising from metals companies that he believes in.
“I’m careful about who I select as an advertiser,” said Spina, adding he turns down advertising money from about 30 percent of the companies that offer it. “I sift through the opportunities and try to pick the best ones.”
Win-Eldrich Mines, a Toronto-based mining company, has bought advertising on Goldseek.com.
Spina said on March 2 he independently touted the stock, then trading at 90 cents a share. During the next two trading days, shares soared to $1.39. The number of shares trading hands jumped from 20,000 a day to 226,335.
Spina reiterated his “buy” recommendation in early April, when shares had plateaued at about $1.50. During the next week, the stock price jumped to as high as $2.51 a share. Shares closed Wednesday at $1.67.
Spina says he has owned shares of Win-Eldrich for more than two years. He declined to disclose the value of his holdings in Win-Eldrich.
Staff writer Will Shanley can be reached at 303-954-1260 or wshanley@denverpost.com.
