I think there are 20 million shares outstanding, not sure. I agree, It sure doesn't trade like it has that much stock out. What do you think of the story:
You Can Really Buy a Rolex for $1,000? An Internet Opportunity in Pawn Shops With Pawnbroker.com [PBRR]
stockhouse.com
Miami, FL, October 7 /SHfn/--Like many areas involving money, there are misconceptions about this unwanted stepchild. Few would include the lowly pawnshop in polite conversation, but it is in the money-lending business. Sort of. Pawnshops specialize in secured non-recourse loans, mostly on a one-shot basis to those down on their luck, and the "vig" is a bit steeper than Visa or MasterCard. Spin-doctors call this the specialty financing business, but as you already know, most of those loans aren't repaid. Because pawnshops lend out money against 10 to 30 percent of the collateral's value, there can be some tantalizing discounts on the merchandise when the resale window opens up.
At last glance though, there weren't any pawnshops adjacent to Tiffany's or Cartier on either Fifth Avenue or Rodeo Drive. So bargain shoppers resort to phoning via the Yellow Pages instead of flipping through Town & Country magazine for the latest sales. Pawn loan inventory comes from Wells Fargo and Chase Manhattan credit applicant rejects. But, you might be surprised at how frequently merchandise originally came from the earlier mentioned white-gloved stores.
Still, it's an industry badly in need of a fluffy public relations makeover. One investment analyst confused pawnshop patrons with K-Mart blue light clientele, telling StockHouse that the only people who would visit a pawnshop website were "trailer trash"". WRONG! While that attitude sounds like a good reason to stay away from a new issue, such as Pawnbroker.com [PBRR] , once the idea evolves into an Internet Concept, and a rallying cry emerges, then even a cynical analyst is likely to board the Pawnbroker.com bandwagon. Again, you would be surprised who shops at pawnshops and what kind of deals they find. Also, how many trailered occupants are Net surfers?
With other Big Idea-type Internet launches over the past few years (ref: Amazon.com [AMZN] & mass market Internet bookselling or eBay [EBAY] & online auctions), the newly formed Pawnbroker.com may follow the same proven recipe for success. Ingredients: Take a widely fragmented and well-known industry and launch an E-Commerce website that services that industry. Instructions:
Consolidate the industry or offer up your own version (that in itself results in a consolidation) by pumping out loud, ubiquitous and clever advertising with budgets the size of Bolivia's GDP.
Pawnbroker.com [PBRR] hopes to compete, it appears, against Cash America [PWN] and the more than 15,000 mom-and-pop pawnshops dotting the strip mall grottos and down-market urban sections of North America. Company officials claim they plan on consolidating as much of this industry as possible, and dazzling web surfers with more than enough merchandise to make an eBay hard-liner gasp with envy.
There are several very good reasons why Pawnbroker.com can actually consolidate this industry, in much the same way Service Corporation [SRV] and H&R Block [HRB] gobbled up equally morbid and low profile mom-and-pop shops. Pawnshop owners would love to turnover their inventory faster than the nearly 18 months "hold" period that currently exists. How many businesses take longer than a year to move product out of their shop and aren't hounded by creditors? Go ahead, name one.
It is because of that incentive that Pawnbroker.com has attracted more than the alleged 2,000 pawnbrokers before the hard launch of their E-Commerce website. Having about 13% of the market on-side and around four times the amount of stores as the market leader, Cash America [PWN], is not something to pass by without closer inspection. Sure, not all 2,000 (or probably more by the time PBRR actually launches) are going to stick and none are likely to offer their entire inventory, but enough should to attract both consumer and market interest.
Pawnbroker.com won't be holding the merchandise; they will act as the clearinghouse, i.e. a Pawnbroker's broker. Revenues are to come from commission fees that Pawnbroker.com will collect from pawnshops for advertising the merchandise on their E-Commerce website and they are projected to be quite healthy. The website would also include a PR function for the industry and one has already been discussed although the company wouldn't say what it would be. Just having their planned website would give the industry more public relations PR than they've had in about two or six centuries. (Remember that this is the business whose signs in medieval times were identified by three brass balls, which was one more than we could afford to give.)
Because Pawnbroker.com won't actually be buying the pawnshops, but just advertising the pawnshop merchandise, the majority of its budget would go into advertising - rather than rent, electricity and heating oil. By owning a brand-name website, the company would own a cyberspace niche as opposed to spending beaucoup bucks buying up thousands of pawnshops. It's an ideal strategy if you think it through.
On a comparison against online auctions, pawnbrokered merchandise is likely to avoid the eBay stigma because each pawnbroker must be licensed and report suspicious merchandise to the police before offering it for sale. Because pawnbrokers have brick-and-mortar locations for their merchandise, everything would be certified for sale and just add a mail-order function to the existing pawnshop. It wouldn't be Uncle Bernie trying to sell off his antique brass fireplace irons out of the garage as you would find at an online auction site.
Pawnbroker.com is now on a series of San Francisco and New York roadshows with most financial institutions having appeared to give the company a welcome reception. Venture capitalists at 3000 Sand Hill Road in Menlo Park seem to have taken an interest in the company and coast-to-coast meetings should continue for another week. The very big company rollout may not come until later in the fourth quarter or early next year, but the company expects a number of beta-test launches with a small number of partners prior to that.
The opportunity is there because pawnshops are another "hidden" industry, much the way bookshops and auctions were before Jeff Bezos and Maggie Whitman, respectively, or H. Wayne Huizenga before them in waste management. You see or hear about such businesses, but you don't really believe they have mass-market capability. Who would think of amassing thousands of pawnshops onto one mass-market website? That takes vision and a certain amount of guts (read as "risk"). The final ingredients in the Internet recipe are those embarrassing clich‚s, which, tedious as they are to mention here, is what drove the above executives past their hurdles to bring their concepts to market.
And that explains why they are the billionaires and why we are their consumers. Does Pawnbroker.com have what it takes? No one really knows yet, but when the independent investor finds out, it may have already been too late to get in early.
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