Few parents know about this company. Alloy has been operating "under the radar" since being founded in 1996. That changed when Alloy took over the failed Channel One company on April 23, 2007. Alloy recklessly publishes trash novels like "Gossip Girl" for teens and preteens. These novels promote underage drinking, celebrate illegal drug use, and normalizes casual sex. These teen/preteen books created by Alloy are filled with four-letter words. Alloy's message is clear: if you want to be cool in middle school or high school you should be having multiple sex partners, you should be smoking "joints" and you should be binge drinking like there is no tomorrow. This is Alloy's sick world for kids.
Alloy.com is a site that allows hardcore pornography links to be posted on their dangerous message boards. Sugarloot.com is an Alloy-created site that encourages teens themselves to post scantily-clad pictures of themselves on the Internet. In other words Alloy is a company no parent should want near their children. Obligation is committed to exposing this outrageous company.
Alloy Latest News 2008
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WARNING: GRAPHIC SEXUAL CONTENT FROM ALLOY.COM
Alloy.com: One Vile Web Site
Be warned. Obligation is out to bust one of the filthiest places on the web: Alloy.com.
Yes, there are much worse adult web sites, but what makes Alloy.com so bad is the content is intentionally aimed at teens, preteens and even younger children.
Here are a few postings randomly taken from Alloy's message boards for KIDS. If there is any monitoring going on by Alloy, it is not apparent.
What we are doing is simply taking a picture of content on Alloy.com's site and posting it. We are not changing anything. The only editing is in the act of choosing what to take a picture of. There are many postings on the message boards that are not vulgar but our point is there should be none of this content on any web site aimed at young people and children.
 
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It's a steal @ $6.75, but you might want to wait.
Charts
Matt Diamond is the founder and CEO of Alloy Media and Marketing.
Kent Haehl used to be Channel One's VP of Sales. He left the company several years ago and has been hired back as Channel One's CEO.
Alloy's stock peaked at
$91in 2001. Today December 3 it is trading at $6.75. There have been no stock splits.
Below: Alloy's stock compared with the S&P 500 since 1999. (Alloy in blue down over 80%. S&P in red up 17%.) Is the marketplace telling Alloy there is no future in exploiting children?
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Alloy peddles smut to teens and preteens.
Gossip Girl
 
Alloy's sleazy TV show. --------------------------------------Alloy's sleazy book.
Both aimed at teens and preteens.
Matt Diamond
Alloy's and Channel One's CEO and Sleaze Peddler.
Parents Television Council review of the Gossip Girl TV show.
Channel One's parent company Alloy, Inc. has published a series of disturbing books aimed at teens and preteens. The Gossip Girl books are meant to be shocking.
In the books, narrated by the unnamed Gossip Girl, teenagers have sex, they constantly drink alcohol, and they smoke marijuana and take Ecstasy and other drugs. Their parents don't mind, indeed, they often provide the alcohol for their teen sons and daughters. These Alloy books make everything that is self-destructive seem like a lot of fun with no consequences. Alloy's CEO Matt Diamond oversaw the creation of these smutty books and the production of the new TV show on the CW Network.
| A sample of Alloy's Gossip Girl book. |
It wasn't difficult to see who the real goddess was. Venus looked like a lumpy pile of marble compared to Serena. Nate staggered over (note: several paragraphs earlier both teens "had martinis at the little bar upstairs") to the fountain and got in with her, and soon they were tearing the rest of each other's clothes off. It was August after all. The only way to tolerate the city in August is to get naked.
Nate was worried about the security cameras trained on his parents' house at all times, front and back, so he led Serena inside and up to his parent's bedroom.
The rest is history.
They both had sex for the first time. It was awkward and painful and exciting and fun, and so sweet they forgot to be embarrassed. It was exactly the way you'd want your first time to be, and they had no regrets. Afterwards, they turned on the television, which was tuned to the History Channel, a documentary about the Red Sea. Serena and Nate lay in bed, holding each other and looking up at the clouds through the skylight overhead, while they listened to the narrator of the program talk about Moses parting the Red Sea.
Serena thought that was hilarious.
"You parted my Red Sea!" she howled, wrestling Nate against the pillows.
Nate laughed and rolled her up in the sheet like a mummy. "And now I will leave you here as a sacrifice to the Holy Land!" he said in a deep, horror-movie voice.
And he did leave her, for a little while. He got up and ordered a huge feast of Chinese food and bad white wine, and they lay in bed and ate and drank, and he parted her Red Sea once again before the sky grew dark and the stars twinkled in the skylight.
from page 27 Gossip Girl by Cecily von Ziegesar copyright by 17th Street Productions, an Alloy, Inc. company.
Note: In the above passage Nate, a high school senior, is remembering his first sexual experience with Serena who is also now a senior. How much younger they were is left for each young reader to imagine. |
The Gossip Girl TV show is produced by Alloy Entertainment a sister division to Alloy Media and Marketing which now is producing Channel One News.
Gossip Girl the TV show is rated "TV 14 DLS" which means it is as about as dirty as you can in primetime. In the first show there were two attempted rape scenes and one long sex scene with two teenagers. There were lots of scenes of teen drinking and several of teens smoking marijuana. One can picture Alloy's Matt Diamond at his home watching his teen sex show and hoping the ratings go through the roof.
Obligation's president Jim Metrock said, "Alloy is in the smut business and it should be a crime for Alloy to peddle their sleaze to children and teens. Any adult who puts this slime in front of kids is beneath contempt. Matt Diamond is a rich man because he knows how to grab the attention of young people. What a shame he feels it's necessary to glamorize drinking, taking drugs and having sex to his youth audience to accomplish his financial goals."
Alloy is the new owner of Channel One News for one big reason: they want to promote Alloy companies and Alloy products to Channel One's captive audience.
Obligation has not seen any ads for Gossip Girl on the Channel One News TV show or on the Channelone.com site. That however can change at any day.
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We've broken down a long description to better understand what Alloy does.
What Is Alloy?
About Alloy (NasdaqGM:ALOY)
Alloy, Inc. provides media and marketing services
under the Alloy Media + Marketing name in the United States.
The company provides nontraditional media
and promotional marketing programs
connecting with targeted consumer segments.
It manages an array of assets and services
in interactive, display, direct mail, content production, and educational programming.
The company serves with approximately 1500 companies, including half of the Fortune 200.
Alloy specializes in the event and field marketing,
sampling and customer acquisitions programs,
Internet design services,
and consumer research.
It also offers residence hall linens,
diploma frames,
residence hall carpets,
and care packages;
distributes product samples in elementary schools,
high schools,
college campuses,
bookstores,
dining halls,
and student organizations;
and provides sampling and promotion for bars and restaurants.
It also provides third-party advertisers
access to display media boards;
develops and produces books,
television series,
and feature films;
publishes editions of college guides
and provides information on colleges and universities through its Web sites;
publishes and distributes magazines
to provide guidance to students on choosing a career,
selecting a school,
and paying for college;
provides an online scholarship search and matching service
and focuses on internships and part-time jobs for college students;
and offers an online social networking community for high school students.
In addition, the company offers additional advertising opportunities
on various Web sites for college students,
minority students,
and practicing professionals
in the nursing and allied health fields.
Further, it provides advertising placement solutions for marketers
targeting consumers in the college,
multi-cultural,
and military markets.
The company was founded in 1996 and is based in New York, New York.
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Gut-check time for new owner. Will Channel One be shut down?
Will Alloy Spend Millions On A Dead Brand?
From Jim Metrock:
Alloy, Inc. (aka Alloy Media and Marketing) is the new owner of Channel One.
They bought the company in April of this year.
At the time of purchase Channel One had zero net worth (their assets equaled their liabilities).
This basically means that Alloy obtained Channel One for nothing.
Wow, what a bargain!
I knew Alloy would regret the Channel One purchase as time went on for several reasons: 1. Schools don't show the program anymore. 2. Channel One has a problem with getting accurate viewership information. 3. Advertising on Channel One is no longer viewed as acceptable by ad agencies and individual companies. 4. The cost of upgrading Channel One's equipment will be far greater than anticipated.
A recent filing with the Securities and Exchange Commission (SEC) sheds light on a new Channel One nightmare for Alloy. Alloy has violated SEC regulations by its purchase of Channel One. Alloy for some reason considered Channel One a "non-business." If it wasn't a business, then Alloy didn't have to disclose certain financial information about Channel One. The SEC told Alloy that Channel One is a "business" and that the registration of the transaction will not be "effective" until the proper information is provided the SEC. Alloy says even if Channel One is a business, they can't get the information the SEC needs. Yipes.
From Form 8-K/A for ALLOY INC, 7-Aug-2007:
At the time Alloy filed the above-referenced Form 8-K regarding the Channel One acquisition, Alloy believed that the acquisition of the operating assets of Channel One did not constitute the acquisition of a "business", as that term is defined in Rule 11-01(d) of Regulation S-X. The SEC has disagreed with Alloy's determination. As a result, since a business was deemed to be acquired, and the business qualifies as "significant" under the tests set forth in Rules 3-05 and 1-02(w) of Regulation S-X, audited financial statements for Channel One are required by Rule 3-05 of Regulation S-X and pro forma financial statements reflecting the acquisition are required by Article 11 of Regulation S-X. Alloy sought a waiver from the SEC of these financial statement filing requirements citing several reasons, including that no audited financial statements for the acquired assets of Channel One had been prepared or were available, and that it would be impossible for Alloy to provide those financial statements given the lack of financial information regarding Channel One as a separate business that would be necessary to prepare the financial statements. Alloy's request for this waiver was not granted by the SEC. The SEC has informed Alloy that until it files audited financial statements for Channel One as required under Rule 3-05 of Regulation S-X and the pro forma financial information required under Article 11 of Regulation S-X, the SEC will not declare effective registration statements or post-effective amendments filed by the Company. This restriction does not apply to currently effective registration statements covering employee benefit plans, transactions involving secondary offerings or sales of securities under Rule 144.
This is simply incredible stuff. Is Alloy saying Primedia (the previous owner) had no financial statements or records for Channel One? Did Alloy buy Channel One without reviewing the company's financials? I can't imagine a company buying a company like Channel One without doing a complete financial evaluation. Yet Alloy appears to be saying they were clueless when they bought Channel One.
Alloy could face "delisting" because of this problem. That would mean NASDAQ, the exchange that trades Alloy stock, could drop Alloy and it would become difficult to buy or sell Alloy stock. Alloy has come close to being delisted before. Delisting is a very bad thing for any company, but would be especially bad for Alloy since they are a struggling company. They have never posted an annual net profit since they started in business in 1996. Trouble with Channel One is the last thing this company needs.
But Alloy DOES own Channel One and they HAVE TO respond to the SEC and they HAVE TO spend millions on upgrading the old Channel One equipment and they HAVE TO organize a massive campaign to get school administrators to begin making students watch the Channel One News TV show.
Or ... Alloy executives could look into the abyss they are on the edge of and pull back. Alloy could just shut Channel One down and save years of agony and controversy and millions of dollars of precious cash.
Alloy's CEO Matt Diamond has not just made a mistake - he has made a colossal mistake. Like the schools that thought Channel One's TV network was free, Diamond thought that the Channel One company was free because he didn't have to lay out any cash for the purchase. But like the schools, Diamond has found out that there is no "free lunch." The Channel One company like the Channel One TV show is proving to be very, very expensive.
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Alloy tries to keep investors in dark about Channel One's financial condition.
SEC Wants More Information On Channel One Deal
Form 8-K/A for ALLOY INC
7-Aug-2007
Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The discussion below under Item 2.01 with respect to the Channel One acquisition is incorporated herein by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
As previously disclosed, on April 20, 2007, PRIMEDIA, Inc., a Delaware corporation ("PRIMEDIA"), Channel One Communications Corporation, a Delaware corporation and wholly-owned subsidiary of PRIMEDIA ("Channel One"), and Alloy C1 Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of Alloy, Inc. entered into and closed an asset purchase agreement (the "Channel One Asset Purchase Agreement"), pursuant to which Alloy acquired the operating assets of Channel One from PRIMEDIA. Pursuant to the Channel One Asset Purchase Agreement, Alloy received $8.6 million of working capital (of which $5.0 million was in cash) from PRIMEDIA, in exchange for assuming approximately $8.6 million of existing and future liabilities of Channel One. The $8.6 million working capital payment made by PRIMEDIA to the Company represented PRIMEDIA's estimate of the costs that PRIMEDIA would have incurred, at the time of the transaction, in connection with causing Channel One to cease all operations and extinguish all liabilities related to such operations. Accordingly, the Company did not expend any cash to acquire Channel One, as the value of the net assets that were acquired approximated $0.
Channel One produces and provides ten minutes of programming and two minutes of commercial advertisements each school day to over 10,000 middle and high schools across the country. Channel One distributes the programming and commercials via satellite to the individual schools. The assets that were acquired include the receivers, televisions and related equipment that are in each of the schools.
A copy of Alloy's press release relating to this event was attached as Exhibit 99.2 to Alloy's Current Report on Form 8-K that was filed with the SEC on April 26, 2007.
ITEM 8.01 OTHER EVENTS
At the time Alloy filed the above-referenced Form 8-K regarding the Channel One acquisition, Alloy believed that the acquisition of the operating assets of Channel One did not constitute the acquisition of a "business", as that term is defined in Rule 11-01(d) of Regulation S-X. The SEC has disagreed with Alloy's determination. As a result, since a business was deemed to be acquired, and the business qualifies as "significant" under the tests set forth in Rules 3-05 and 1-02(w) of Regulation S-X, audited financial statements for Channel One are required by Rule 3-05 of Regulation S-X and pro forma financial statements reflecting the acquisition are required by Article 11 of Regulation S-X. Alloy sought a waiver from the SEC of these financial statement filing requirements citing several reasons, including that no audited financial statements for the acquired assets of Channel One had been prepared or were available, and that it would be impossible for Alloy to provide those financial statements given the lack of financial information regarding Channel One as a separate business that would be necessary to prepare the financial statements. Alloy's request for this waiver was not granted by the SEC. The SEC has informed Alloy that until it files audited financial statements for Channel One as required under Rule 3-05 of Regulation S-X and the pro forma financial information required under Article 11 of Regulation S-X, the SEC will not declare effective registration statements or post-effective amendments filed by the Company. This restriction does not apply to currently effective registration statements covering employee benefit plans, transactions involving secondary offerings or sales of securities under Rule 144.
At this time, the Company believes that it will submit another waiver request to the SEC after it files its Form 10-K for the fiscal year ending January 31, 2008, which will include the Channel One operations.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Alloy is currently unable to provide audited financial statements required by Item 9.01 of Form 8-K with respect to the acquired assets of Channel One because Alloy does not have access to such financial statements, despite having devoted substantial efforts to obtain them. Alloy's current understanding and belief is that separate financial statements for Channel One that would meet the requirements of the Form 8-K do not exist. Alloy intends to include financial information related to Channel One in its Annual Report on Form 10-K for the fiscal year ending January 31, 2008.
(b) Pro Forma Financial Information.
Alloy intends to file, to the extent possible, pro forma financial information required by this item in its Annual Report on Form 10-K for the fiscal year ending January 31, 2008.
(d) Exhibits
2.1 Asset Purchase Agreement by and among Alloy, Inc., PRIMEDIA, Inc., Channel One Communications Corporation, and Alloy C1 Acquisition, LLC, dated as of April 20, 2007 |
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Alloy should be upfront with kids. Stealth ads are unethical.
Sneaky Advertising
The mission of Alloy.com is to sell as many things as possible to young female visitors to their site. Alloy employs many methods of getting a young person to part with their money.
Below is one example.
This screen shot of an Alloy story looks like a "how-to" article. The helpful people at Alloy are giving youngsters tips on how to apply nail polish. (Alloy is always pushing children to grow up as fast as they can. Only by doing so can they sell them more products.) The article in reality is just one big ad. There is no header that says. "Advertisement." If Alloy did that they might not get as many purchasers. Deception is the rule at Alloy. By making it look like the editorial part of Alloy is endorsing this particular product the product gains much more credibility. A young person who reads this "article/ad" is being taken advantage of - a 16-year-old may be taken advantage of less than a 10-year-old, but in both cases it is wrong.
Adults don't like advertising that masquerades as something else so it is even more outrageous when Alloy plays such tricks on kids.
In this "article/ad" there is a link to a store that is offering this product for sale. There the young person can make the purchase. Alloy, more than likely, will get paid for sending the purchaser to the store site. Even if they don't get paid per "click-through" the more sales that result from Alloy making up phony articles that are really ads will allow Alloy to raise its ad fees.
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