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Non-Tech : NetBank(NTBK)-formerly Atlanta Internet Bank
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To: let who wrote (2157)8/1/1999 1:10:00 PM
From: Secret_Agent_Man   of 2414
 
NETBANK-Short candidate per Barrons here's why>
Q: Okay, tell us another negative story.
A: Net.B@nk is an online bank. The stock was shifted to the
Nasdaq National Market list from the small-capitalization list
on February 5, and quickly soared to 83 from a 12-month low
of 3.58. Recently it was about 24. Our downside target is 7-10.
This thing has a huge, huge multiple relative to the overall
banking industry, and has a very low spread between what they
pay for deposits and charge for loans. True, its deposits are
growing very quickly, but I believe this inflow will slow down.
By not having a bricks-and-mortar facility and not having
face-to-face relationships between loan officers and customers,
Net.B@nk needs to pay a much higher rate for deposits
collected online than, say, First Union, does in a traditional
facility. I see online banking as a complement to face-to-face
banking. If I need a loan or other stuff, I'm willing to go to a
real bank. I'm not going to mail stuff back and forth.

We think Net.B@nk can carve out a niche for itself. But if you
think about it, the clients they are getting probably are chasing
high yields. They may actually be carving away from other
banks the least profitable segment of their business.

interactive.wsj.com

need to be subscriber

no position just FYI
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