Stephen! Who loves ya, baby!

Actor Stephen Baldwin is a so-so box office draw, but on the Hollywood Stock Exchange he has nowhere to go but up.

The Internet exchange is the creation of Max Keiser, a former Shearson Lehman Brothers and Paine Webber stockbroker. He set it up six years ago as a game to trade virtual shares in movies and celebrities.

But a funny thing happened along the way. The game became so hot it began to dominate New York and Hollywood cocktail party chatter. Now, players are spending real money to buy portfolios on auction sites like eBay.

“The Hollywood dollar will trade at parity with the U.S. dollar, and 30% of annual income will be derived from trading on hsx.com,” says Mr. Keiser with only a hint of hyperbole.

Expanding vision

With Stephen, the youngest of the three acting Baldwin brothers, as his spokesman, Mr. Keiser has grand visions that he can remake the way Hollywood does business.

“The idea is one that could probably expand in the marketplace in other ways than it is being utilized now,” said the actor, interviewed by InvestmentNews via telephone while on location in Montreal. “Virtual currencies will be one of the useful everyday currencies people will be utilizing.”

Anybody can log onto the website and sign up for the game. In return, they get $2 million in Hollywood dollars to invest. Movies trade in stocks, stars in bonds and you can also buy mutual funds.

HOw sweet it is!

The exchange sweetens the deal by allowing players to cash in their portfolios for real money. The going rate is $1 for every $1 million in Hollywood dollars, but eBay prices may be higher for hot portfolios.

Mr. Keiser says the site has 900,000 unique monthly visitors (a standard Internet measure) and 500,000 investors. Some two billion shares change hands in 70,000 cybertrades daily.

The HSX says its average trader is a male, 18 to 34, with a median household income of $60,000.

Media/entertainment professionals (26%), computer techies (25%) and those in financial services (15%) make up the bulk of the players; 11% are college students and about 37% are women.

Ross Levin, president of Accredited Investors in Edina, Minn., and onetime president of the International Association for Financial Planning, first logged onto the site last week.

growth all the way

“My strategy will be growth.” he pronounces. “I will be all over [golfer] Tiger Woods and probably pick up some [NBA star] Kevin Garnett. Hillary Swank is my sleeper stock.”

Mr. Levin is undecided when it comes to Oscar picks, “My problem is that I like `Cider House Rules’ the most, but I don’t think it’s the best investment. `American Beauty’ is tried and true.”

Aside from the fun of it all, Mr. Levin says players can learn some lessons about how regular stock trading works.

“You would be best compensated by buying stars of the moment and riding the momentum strategy as opposed to buying yesterday’s stars,” he advises.

The prices of movie stocks and star bonds are based on how much money they make at the box office.

Not surprisingly, the bonds of big draws like Tom Cruise ($5,013) and Jennifer Lopez ($2,936) pull top dollar.

Stephen Baldwin bonds were trading at $957, off the pace of older brother Alec, who comes in at $1,319.

“Mission to Mars,” which opened last week, was priced at $69, while “The Ninth Gate” opened around $18.

Mutual funds include Howard Stern’s Fantasy Fund, which uses the symbol BABES and invests in the shock jock’s favorite actresses and their films.

The Animation Fund (TOONS) invests in animated stars and movies. As of last week, it was the top fund, trading at $202 a share.

“Be careful of owning Jennifer Lopez; you don’t know what research might uncover,” says Mr. Levin. “I’d stay away from rappers, they could blow up quickly.”

And he also advises: “Beware of negative earnings surprises like when Kathy Lee Gifford resigns. It is always dangerous to invest in mergers that fall apart like Rick Rockwell and Darva Conger,” the “Who Wants to Marry a Millionaire” couple.

Mr. Levin thinks the website will keep players glued to the screen, but he says he can’t imagine Hollywood dollars becoming “the next competing world currency,” as Mr Keiser envisions.

The Wall Street veteran believes he’ll be able to finance feature films through hsx.com. He intends to survey site visitors to find out what kinds of films they want to see. Then, he says, he’ll use that information to leverage Hollywood deals.

“We are going to have a much more culturally rich film product as a result. This is going to be public television on steroids,” he says.

The 1983 graduate of New York University’s theater program is already a minor celebrity in Los Angeles, where he is host of a weekly radio talk show and appears on the syndicated TV show “Access Hollywood.”

He says his company has raised $23 million from the likes of Citigroup Inc.’s Travelers subsidiary and XL Ventures, a venture capital arm of New York advertising and marketing firm Big Flower Holdings Inc.

NBC has also bought a stake with a combination of cash and TV advertisements, he says.

At least Mr. Keiser has made a believer out of Mr. Baldwin, who is currently shooting “X-Change,” a sci-fi film for HBO in Canada.The actor says he’s confident about the dot-com’s future.

He admits, however, that he’s no Wall Street whiz and has no personal account on hsx.com.

But he gets his feet wet once in while with a house account, and thinks the company will go public soon.

As for Mr. Levin, he’s hooked.

He’s pondering diversifying his portfolio with a daytime soap fund, and has no plans to cash out anytime soon. “I think I’m gonna let this thing ride. I’m going to be a mogul.”