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Technology Stocks : QUOT - Quotesmith
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To: Mr. Tomatohead who wrote (14)8/4/1999 8:55:00 AM
From: Knight  Read Replies (2) of 75
 
I had a chance to get some IPO shares on this by opening a Charles Schwabb account. (Got a card in the mail. I assume this was sent to Quotesmith customer list.) I was excited about the opportunity since I've used Quotesmith. However, after reading the materials and doing some calculations, I decided not to do it:

With the IPO the company has over 18,500,000 shares. The IPO price of 11 gives a market capitalization of about $200 million. This is for a company whose revenues (not profits) were only about $5.5 million. This gives it a price/revenue ratio of 37. I then looked at revenue growth and was disappointed. I can't remember the exact figures, but it seems like they grew revenue only about 30% or so between this year and last--pretty meager for something priced as rich as this one. I had expected much better--especially after all the advertising I've seen from them. I don't see how they can justify that IPO price. I guess they thought they could get a premium because of the ".com" prefix.

Perhaps one day I'll look back and regret I didn't get in on this, but based on the information I've been able to glean, I just can't can justify the current price to myself (even at 9) without throwing financial reason to the wind. If anyone has any data to add that will give me a different perspective, I'm interested--particularly if you can show any credible projections that the market potential here justifies the market capitalization.
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