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Technology Stocks : ESPS, Inc. (NASDAQ: ESPS)
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To: WTSherman who wrote (2)6/11/1999 7:53:00 AM
From: Topannuity  Read Replies (1) of 26
 
WTS- I re-read the prospectus. You have a good point about ESPS operating in a limited market niche with little growth potential. (I can't really tell myself since I don't work in a technology-related field.)

Regarding ESPS's current financials:
Sales grew 100% from 97 to 98 (from $8.6 to $17mm)
EPS on a diluted (after IPO) basis will be $0.10
This gives the stock a P/E of 100 at the midpoint of the $9-11 pricing range.
If sales growth slows from here on, or ESPS encounters any other problems, the $10 price will probably be considered too rich, given there are many "blue-chip" technology companies selling at P/E's below 100:1, that anyone would rather invest in.

I guess the appeal to me is/was that here we have a profitable IPO operating in a market niche that uses the internet, and being sponsored by a strong underwriter, H&Q. I was counting on an early pop in price that would sustain for the minimum "one-month required holding period" which Schwab enforces on IPO-takers. At that time, I could reevaluate whether or not to keep the stock.

But, your brief comments have rattled me, and now I'm considering rescinding my indication of interest in this one and seeking greener pastures in other IPO plays.

I may just wait till over the weekend and see if anyone else posts information about ESPS which will help me decide whether or not to buy this one.

Hersh
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