Then the financial crisis hit. "It wiped a lot of people out," Bramhill recalls. "Then things started accelerating on these boards ... serious abuse and threats and untruths about the company."
By the summer of 2009 the volume and negativity of the postings had intensified. The main message board dedicated to Nighthawk on ADVFN, which has seen about 100,000 posts since it was set up in March 2007, counted around 7,000 posts in June 2009 alone. Posters claimed Nighthawk had failed to find oil at its wells in Kansas and was set to have assets seized by U.S. authorities because of unpaid bills -- neither of which were true. At first, the Nighthawk share price showed signs of recovery, before slumping to 31 pence in mid-July, 2009. The stock price has continued to decline, and Bramhill announced his departure on September 29 2010. One post on ADVFN said: "Guess that what some folks wanted, right? Probably sick of all the abuse..."
Bramhill has not been the only target. Nostra Terra's Chief Executive Matt Lofgran, one of AIM's youngest chief executives at 34 years of age, recalls a similar experience. "At one point they insinuated I was a drunk driver," says Lofgran, who states categorically that he has never had a conviction for drink driving. "It's not really what you want for a CEO of your company."
Tom Kelly, chief executive of fellow oil explorer Empyrean Energy, says he too is monitoring the situation after a series of what he calls "damaging remarks" on the boards. "AIM enables investors to short," says Kelly. "You can't do that with junior stocks in places like Australia. It's something for regulators to be aware of -- if they see the need to regulate that would be welcome. I'm all for free markets and information but we must have some protection for small investors."
SPLIT PERSONALITIES
Steve Davies is just one such small investor. A regular user of the boards since he developed a passion for investing in small cap companies after retiring, Davies lives in Cyprus and says he generally enjoys taking part in the daily banter on the boards and learns things on them he wouldn't read elsewhere.
But he also knows a takedown when he sees one, and he watched in horror as the attack on Nighthawk unfolded. "The allegations that were being made by four of five posters or one person with multiple IDs were extremely well written, they drove the price down massively," Davies says. "Whoever was making those postings knew they were complete falsehoods, but they were making very sophisticated, backed up statements.
"We know this because the price absolutely bottomed, and then obviously that person started buying in big time, and they went straight back up again the next day -- and they made a complete killing and never posted on the board again. We never heard from them."
Nostra Terra CEO Lofgran said the most aggressive poster about his company had over 20 different aliases. "He'd sit there and have conversations with himself so there would be the appearance of a whole horde of people all up in arms. It's a mob. Let's go lynch these people!" he says.
That may all be true, some regular board users point out, but companies also blame the boards to cover up their own shortcomings. One-time Nighthawk investor John Douce, a retired civil engineer, sympathises with Bramhill but is sceptical about suggestions the boards were to blame for the company's share price collapse. "David Bramhill has suffered personal abuse, stalkers, anonymous letters to his house, false reports to the police and all of those sort of things. That should be dealt with by ordinary laws," says Douce, who spends several hours a day glued to his computer screen. "But the share price decline leads one to believe all is not well on planet Nighthawk."
Sitting perched over his computer in his semi-detached home in east London, Douce concedes that the tone of the messages helped inform his decision to sell his Nighthawk shares. "It caught fire. I realised the way it was going. It just got angrier and angrier, more aggressive, and I thought 'I'm out'.
"Companies may well say that their price has been affected (by negative postings) but I don't really think that has been the prime cause of the company being undervalued. It may have been that has drawn attention to an overvalue, and I think that happened with Nighthawk."
Douce reckons all companies -- not just Nighthawk -- can avoid becoming targets by being more transparent with shareholders. "Companies must be willing to be more open in terms of answering genuine questions," he says. "Instead of just saying everything is wonderful, they should perhaps issue more information, not just the bare minimum."
Bramhill's successor as Nighthawk chief executive, Tim Heely, denied the share price decline represented fundamental problems with the company. "I appreciate that view, it's quite an entertaining view but it is incorrect," he told Reuters. "Our strategy ... is to turn this company around from an operational sense and drive the share price forward from that."
WHAT'S IN A NAME?
Given the reluctance or inability of the regulator to intervene, companies in Britain have begun to turn to the courts to seek redress against abusive posters. Britain has some of the strongest defamation laws in the world, with the burden of proof on the defendant. "The first thing we check is where the website is registered. If it's in the U.S. we can't do anything," says Michael Coyle, Director of UK internet law specialists, Lawdit, referring to freedom of speech protection. In the UK, on the other hand, "defamation can be used very powerfully. Solicitors take cases on a no-win, no-fee basis."
To bring such a case, though, companies need the identity of the person posting, and only a fraction of commentators use their real names. Because websites protect the identities of their subscribers -- many cite data protection laws and their own privacy policies -- knowing who to go after has been difficult. That's why Nighthawk and Nostra Terra used the courts to force ADVFN and iii to hand over details they hold on record about users. The tactic -- applying for a so-called Norwich Pharmacal order, named for a 1973 judgment which found that the Norwich Pharmacal Company was entitled to be told the identity of those whose illegal activity was hurting its business -- is now being considered by an organisation representing hotels and guesthouses, for potentially defamatory reviews online.
Just getting the order can cost thousands, if not tens of thousands of pounds, says Paul Chamberlain, solicitor with media lawyers Davenport Lyons. Even then it might yield only an email address, which will require another order to force the email provider to release records. "You're incurring significant costs to get involved in litigation even before incurring the significant costs of litigation," Chamberlain points out.
Despite those hurdles, Nostra Terra's Lofgran says he remains as determined as ever to face his tormentors down. But a spokesman for Nighthawk Energy said the company had decided not to pursue legal action against posters following Bramhill's decision to retire. In September, Bramhill had railed against the injustice of the attacks. "I'm a relatively rich guy and my reaction was to say: 'To hell with this...' Why should I be subjected to it? Somebody said 'I'm going to come down and put a shotgun to your mouth' and yet they allow this... It is shocking."
Davies, the Cyprus-based investor, believes self-regulation is the best way forward. "I think it's the responsibility of the people who use the board to report to the company that this has happened so the company can take action," Davies says. "I can't see how the board can monitor every single post."
In Hampstead, Marmor says people should do their own research, be careful, and stay wary of the boards. Then she looks at her monitor and smiles: "Finally! I get a ping to the upside!" (Edited by Sara Ledwith and Simon Robinson)