Stock pick alert from the Stock Genie for GLBND. It looks like the the company is heating up the public relations side of things.
I'm pasting the analysis below for newcomers to the thread. For those of us who know the company, scroll down to the section on present valuation.
They make a good case for $33 But what is interesting is, this is based on their present 165,000 registered users, the potential for growth presented by their exclusive deal for financial services with Freeserve and its 1,000,000 million customers is not factored in.
Stock Genie's SPECIAL ALERT
(http://www.stockgenie.com/)
July 30, 1999
***********************SPECIAL ALERT**************************
STOCK GENIE'S NEW SPECIAL ALERT: GlobalNet Financial.com Inc.
(OTC Bulletin Board) SYMBOL: GLBND
TODAY'S CLOSING BID PRICE $ 14 3/8
CORPORATE SUMMARY
GlobalNet (GLBND) has achieved rapid acceptance and growth in its quest to become the leading provider of international online financial news and information services designed to combine unique financial content and educational programs, investment and analytical tools and on-line trading and other transaction executions. The Company's strategy is to vertically integrate and combine online transaction executions and e-commerce based platforms with its unique financial content. Through GlobalNet's alliance with Freeserve Limited, (Nasdaq: FREE) the United Kingdom's largest Internet service provider (ISP), UK-iNvest.com is the exclusive provider of investment information within Freeserve's Money channel, featuring interviews and commentary with leading investment managers and analysts about stocks, funds and market trends. GlobalNet's wholly-owned subsidiary, MicroCap1000.com, focuses on companies with a market capitalization of under $500 million and is a leading source for information on the microcap sector featuring original daily articles and a real-time index.
GLBND's U.S. based website, MicroCap1000.com(www.microcap1000.com), focuses on companies with a market capitalization of under $500 million and is designed to be a leading source for information on the MicroCap sector. MicroCap1000.com, recognized for its cutting-edge news and commentary, was rated by Barron's, the Dow Jones business and financial weekly, as one of the top financial websites. Among numerous benefits, the site features a first-of-its kind real-time index on the MicroCap sector with original daily articles on markets, trends and ideas; interviews with leading MicroCap analysts and managers; and a model MicroCap portfolio and portfolio tracking tool.
Through GLBND's alliance with Freeserve Limited, the United Kingdom's largest Internet service provider (ISP) with more than 1.1 million active accounts, the Company launched its first international site, U.K.-iNvest.com (www.uk-invest.com), as the exclusive provider of investment information within Freeserve's Money channel. UK-iNvest.com features interviews and commentary with leading investment managers and analysts about stocks, funds and market trends, and includes daily market news, up-to-the-minute quotes, historical performance charts, and a complete database on the UK's publicly traded companies.
On July 12, 1999, GlobalNet announced a joint venture agreement with First Marathon Inc., a leading Canadian investment firm, to jointly develop an online trading business for Canada and a premiere financial website, Canada-iNvest.com, in Canada. In conjunction with the joint venture, First Marathon has made a $2.5 million strategic equity investment in GlobalNet Financial. The investment by First Marathon follows strategic investments by Freeserve Limited, which made a $15.0 million strategic investment in GlobalNet on May 13, 1999 and a $5.0 million strategic investment on May 25, 1999 from an Italian Consortium consisting of The De Agostini Holding Group, Banca Commerciale Italiana and Investitori Associati. GlobalNet's Italia-iNvest.com is under development. GlobalNet is continuing its world wide expansion of international investor oriented financial sites.
GlobalNet has also attracted a variety of noteworthy strategic technology partners such as Telescan (Nasdaq: TSCN), an industry leader in providing Internet services and innovative solutions for online technology and data retrieval tools. GlobalNet owns 575,000 shares of Telescan. GlobalNet's licensing agreement with NexTrade provides the company with royalty free, worldwide rights to NexTrade's proprietary modular Electronic Direct Access Trading System (E-DAT) for real-time online trading.
GLBND's future as a portal for worldwide market information and global investing with unique financial content and services will be achieved by further developing this unique series of international websites replicating the original model it created for UK-invest.com. By establishing exclusive relationships with ISP's, search engines and portals globally, GLBND's websites will have built-in traffic and enable subsribers to acess in-depth information about the major
worldwide markets.
ONLINE TRADING
The Company is pursuing a niche strategy regarding online trading in the U.S. that focuses on Electronic Direct Access Trading (E-DAT). Unlike browser-based online brokers who may be selectively routing order flow to pre-arranged market makers and dealers in return for payment, E-DAT enables investors, from their own PC's, to enter and execute trades directly with stock exchanges, market makers and Electronic Communication Networks through a brokerage firm offering E-DAT software. The result to the investor is that E-DAT typically enables the investor's orders to be immediately reflected in the marketplace or executed in real-time.
GLBND has also entered into an agreement to acquire the worldwide rights to use NexTrade's modular Electronic Direct Access Trading System on a royalty free basis. The NexTrade ECN is one of nine ECN's in the country and the only one to offer 24-hour trading. An ECN is an electronic network wherein individual customers, whether retail or institutional, cross over-the-counter securities without the involvement of a principal broker/dealer.
Outside the US, the Company anticipates offering traditional, browser based online trading services in connection with major strategic partners. The Company is in discussions regarding the formations of joint ventures for online trading for the UK and the rest of the European Union as well as its joint venture with First Marathon for online trading in Canada.
REVENUE MODEL
GLBND's revenue model is based upon vertically integrating and
combining its unique financial content with online transaction
executions and includes:
Direct access trading for U.S. Securities from world markets;
Browser based on-line trading initially in Canada and the UK;
Advertising
Sponsorship revenues
Subscription fees
STRATEGIC RELATIONSHIPS
GLBND is aggressively pursuing alliances and investments with key online media, Internet and technology companies as well as regularly reviewing potential strategic acquisitions in order to accelerate revenue generation and increases in its regular user base, page view growth and brand awareness.
Recent developments include:
- $15.0 million strategic investment by Freeserve, Ltd. purchasing 13% of outstanding GLBND shares with an option to increase ownership to 19.9%.
-50.0 million strategic investment by De Agostini Banca Commerciale Italiana and Investitori Associati in conjuction with joint venture agreement to develop Italia-iNvest.com.
- $2.5 million strategic investment by First Marathon, Inc.
- Strategic investment via share exchange with Telescan, Inc.
(OTC: TSCN) representing 9.9% of GLBND's then outstanding number of shares with option for TSCN to increase its ownership to 19.9%.
- Technology license from TSCN as well as content syndication at agreement.
- Content alliance with Motley Fool and TheStreet.com for content on UK-iNvest.com and MicroCap1000.com.
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The information presented above was furnished to The Stock Genie by the company.
INVESTMENT OPPORTUNITY
As the company stated they are aggressively pursing alliances and investments with key strategic partners. As an example, in April 1999 GLBND became the exclusive provider of financial information and investment ideas within the financial channel of Freeserve Ltd.
Freeserve is the UK's largest and fastest growing internet service provider with more than 1.3 million subscribers. Freeserve was just brought public this past Monday led by CS First Boston in a high profile stock offering. Freeserve's (FREEV) American depositary
receipts opened at $32 a 36% premium to their $23.67 offering price.
As stated above, Freeserve has purchased 13% of GLBND in doing so John Pluthero, CEO of Freeserve, stated ''We are extremely impressed by GLBND (for approximately $15 million in cash) and this deal gives Freeserve a further stake in GLBND's growth. Cementing our relationship will enable us to work with GLBND to expand their financial web sites worldwide'.
TSCN an industry leader in providing Internet services, innovative solutions for on-line technology, and data retrieval tools signed a strategic syndication agreement with GLBND and purchased a 9.9% stake in GLBND and in return GLBND received approximately a 4% stake in TSCN. This is the same TSCN that has General Electric and Paul Allen as investors. GLBND also has strategic content alliances with the Motley Fool and TheStreet.com.
Bottomline, what we have here is a management team that is committed to growing its revenues, increasing its user base as well as getting the brandname known. GLBND is a financially sound company with $40 million of assets with $23 million is cash on the balance sheet with virtually no debt. Recently, GLNBD completed a one for six reverse split of their stock. Commenting on the reverse split, Stanley Hollander, co-chief executive officer of GLBND, stated, ''After careful consideration, we concluded that this reverse split was necessary in going forward if the company is to become a candidate for Nasdaq Stock Exchange listing, and institutional and analytical support. Concurrently, we have retained the able services of The Del Mar Consulting Group, Inc. to assist us in our efforts to broaden support and interest for GLBND within the investment community.'' The change in capital structure is being implemented in an effort to expedite eligibility for listing on the Nasdaq Stock Exchange.
Currently GLBND trades on the OTC bulletin board a listing on the Nasdaq would increase the Company's international and domestic exposure and could make GLBND a more attractive investment and research candidate for institutional investors and securities analysts. Recall most mutual funds are restricted by their charter from purchasing bulletin board stocks; however, if GLBND were to get a Nasdaq listing it could be open game. When that actually occurs is anyone's guess?
History has shown the power of institutional ownership, ever hear of a one time small-cap called AOL or EGRP?
VALUATION
There are effectively two ways to value GLBND. First of all, the company has stated their desire to enter the on-line brokerage business in one way or another. GLBND currently has approximately 165,000 registered users. Today on-line investors are valued at more than $5,000 per account such as EGRP and SCH. It is the belief of The Stock Genie that GLBND will attempt to convert their 165,000 registered users into some form of an on-line brokerage account to benefit from the higher valuations put on an on-line brokerage account. If we assume that GLBND was successful in converting only 80% of their registered users into an on-line brokerage account or some other form of account that would benefit GLBND from a trade occurring and placed a $2,500 value on these accounts that would equate to a market capitalization of $330 million. (165,000 x 80%= 132,000 users multiplied by the $2,500 value equals $330 million). GLBND has approximately 11 million shares outstanding. Divide $330 million by the total outstanding shares of 11 million that would lead to a potential stock price of approximately $30. The second method is by comparing it to its peer-operating group. According to Bloomberg L.P., GLBND is classified as a Internet Content Company. Within this group are YHOO, TSCM, STRM, TURF and CPTH among 243 others. According to Bloomberg L.P., the average Internet Content Company currently has a market capitalization of approximately $719 million. If on the assumption that GLBND simply trades at 1/2 the average market capitalization of the average Internet Content Company that would equate to approximately $360 million. GLBND currently has
approximately 11 million shares outstanding (approximately 8.8 million are free trading). Divide $360 million by the total outstanding shares of 11 million that would lead to a potential stock price of $32 3/4.
VALUING THE COMPANY UTILIZING EITHER METHOD, BASED ON TODAY'S CLOSING BID PRICE OF $14 3/8 THESE ASSUMPTIONS WOULD IMPLY MORE THAN A 108 PERCENT INCREASE.
For further information please contact:
Michael Jacobs
7280 W. Palmetto Park Road
Suite 202
Boca Raton, FL 33433
Tel: 561-417-8053
Fax: 561-417-8054
or visit the companies' web-sites at: microcap1000.com
or uk-invest.com
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DISCLAIMER
The Stock Genie is an independent electronic publication providing information on selected public companies. Certain companies profiled by Stock Genie pay consideration in cash and/or stock to Stock Genie for the electronic dissemination of company information and, in some cases, web site development. In November of 1998 The Stock Genie was retained as a consultant to GlobalNet Financial.com, Inc. for two years pursuant to written agreement which provides for the immediate payment of $75,000 for its services, including the
electronic dissemination of information concerning the profiled
company and two live netcasts of management presentations. Additionaly, GlobalNet Financial.com, Inc. in a private transaction
has sold to Stock Genie and/or its affiliate, agents or designee
250,000 restricted and unregistered five year warrants to purchase for one dollar common stock of GlobalNet Financial.com, Inc. These warrants have become free trading as of July 14,1999 and adjusted for a 1 for 6 reverse split. Stock Genie, its affiliate, agents or designee currently hold 41,667 warrants with an exercise price of $6 per share. In addition in an unrelated transaction an affiliate of Stock Genie received 35,500 free trading shares of the company's common stock. Stock Genie did not receive any other compensation, of any kind, for its services. Stock Genie and/or its affiliates or agents may at any time after receipt of compensation in stock sell all or part of the stock received into the open market at the time of receipt or immediately after it has profiled a particular company. Stock Genie is not a registered investment advisor or a broker dealer. Stock Genie has been advised that the investments in companies profiled are considered to be high risk and use of the information provided is at the investor's sole risk. Stock Genie has also been advised that the purchase of such high risk securities may result in the loss of some or all of the investment. The information provided by the profiled companies may include information provided by outside sources, such as research reports, public filings or computer databases and information provided to Stock Genie by management of the profiled company. All information is provided by the companies profiled and Stock Genie makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. Investors should not rely solely on the information presented. Rather, investors should use the information provided by the profiled companies as a starting point for doing additional independent research on the profiled companies in order to allow the investor to form his or her own opinion regarding investing in the profiled companies. Factual statements made by the profiled companies are made as of the date stated and are subject to change without notice. The receipt of this information shall not create, under any circumstances, any implication that there has been no change in the affairs of the company profiled since the date of review. Investing in micro-cap securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor's investment may be lost or impaired due to the speculative nature of the companies profiled. |
