otcjournal.com
OTC Journal
August 27, 1999
Volume II, Issue 38
Email : info@otcjournal.com
URL : otcjournal.com
To OTC Journal Members:
Here is our August Profile:
Stockgroup.com Holdings, Inc.
Corporate Web Site: www.stockgroup.com
Ticker Symbol and Exchange: SWEB on the NASDAQ Bulletin
Board
Estimated Shares Issued and Outstanding Fully Diluted: 9.6
million
Estimated Public Float: 3.2 million
Closing Price and Volume: $3 on 16,700 shares
Market Capitalization: $28.8 million
52 High and Low: $10.25 x $2.00
StockGroup.com is the Largest Small Cap and Micro Cap Investor
Destination Site on the Internet today.
If you invest in Internet related stocks, and are looking to benefit from
the dramatic drop in these stocks over the last several months, then
our August profile, StockGroup.com Holdings, is definitely one you
should carefully consider. The Company is making a rapid transition
toward a whole new level of service for its target market.
Despite a recent decision to invest a substantial amount of capital in
advertising with many of the Financial Media Giants, the Company
currently trades at more than a 50% discount of previous levels
achieved back in March and April of this year. In our opinion, it's only a
matter of time before this stock retraces up to it's previous levels and
beyond.
A simple rebound to April's pricing would result in a 50% to 80% profit
from today's trading levels. We are anticipating this turnaround to
begin in September, and therefore are bringing this information to you
far ahead of the rest of the investing community.
We believe StockGroup will become the largest investment community
for small and micro cap investors, an area that has been completely
overlooked by the financial community despite the fact that there are
an estimated 27 million small cap investors in North America.
Internet Communities
The Internet is changing and evolving at light speed. The last time
anybody thought of Yahoo! (NASDAQ: YHOO) as a Search Engine,
the stock was trading at $15 on a split adjusted basis.
The use of the Internet is growing at an exponential rate. To put it in
perspective, it has taken the Internet two years to obtain the same
number of users that took the automobile industry twenty years.
The new buzz word on the Internet is "Communities". Loosely
defined, an Internet Community is a central location on the Web
where people go for a variety of services and information with a
common theme or interest. For example, many investors are familiar
with thestreet.com, an Online Financial Community offering financial
related content, resources, chat rooms, and other related services.
The more people within the community, the more value it creates. It's
that simple. Billboard space along highways costs more when they're
along the 10 Freeway in Los Angeles as opposed to Route 80 in
Nebraska simply because more eye balls see the billboards. Internet
Communities are no different, just more profitable in many cases.
Yahoo! probably has the most widely used communities for affinity
groups. The investment related section of Yahoo! has an
extraordinary amount of traffic. Their quote section alone is rumored
to get over 4 million page views per day. Millions of investors use this
resource regularly, and this has resulted in Yahoo!'s outstanding
performance as both a stock and a company over the past several
years.
StockGroup.com's vision is to be the dominant source of news and
information for more than 27 million micro and small cap investors, in
addition to 12 thousand small and micro cap companies.
Stockgroup.com's Plan to Roll Out a New Online
Investment Community
Stockgroup.com has been developing what we believe to be the
premier Investment Community available on the Internet today
exclusively for small and micro cap Investors.
On April 22nd, Stockgroup.com completed a private placement of
750,000 restricted shares at $6 per share, resulting in $4.5 million in
proceeds. On May 19th, Stockgroup.com completed a second
private placement on 150,000 shares at $6, yielding a total of $5.4
million of new capital raised for the Company with a cost basis of
$6 per share. If you wish to review the press release on the financing,
simply click here.
Therefore, investors at today's levels can pick up freetrading
shares at one-half the cost that institutional investors paid for
restricted shares just four months ago. Thanks to recent weak
market conditions particularly in the Internet Sector, here is an
opportunity for the Individual investor to profit ahead of the
sophisticated institutions.
StockGroup.com has been investing its capital toward developing a
new Internet Community that will be the premier Internet
Community for small and micro cap investors. A "Soft Launch" of
the new site is scheduled for September 13th, and the formal official
launch is scheduled for unveiling on September 28th.
We had the privilege of sneak previewing this new and dynamic format
and all of the planned content for the site, and we believe this site will
become very heavily trafficked by investors over the coming months.
Forty designers and editors have been working 'round the clock
preparing resources and content geared exclusively to small and
microcap investors. It is easy to obtain volumes of information off the
Internet on the several hundred most heavily traded large cap stocks.
However, there are roughly 4,000 small and micro cap stocks not
properly being covered as it exists today. The editors at
StockGroup.com have been gathering information on these Companies
for months. Investors are hungry for information on these stocks, but
are often frustrated by the lack of coverage. StockGroup.com will
provide the solution.
StockGroup.com has compiled information on these 4,000 companies,
and will provide one-stop shopping and research for individual and
institutional investors.
Driving Traffic to the New Site
Just after this New Community goes live, Stockgroup.com is planning a
major media advertising campaign to promote the New Portal. $1.5
million in advertising dollars will be invested in the first six weeks.
The ad campaign strategies have already been planned by Rocket
Science, the company's New York based ad agency. Click Here to read
the press release. Rocket Science has created a very clever ad
campaign, and the creative force behind this campaign, was the same
one responsible for the famous phrase "Oh What A Feeling, Toyota".
The final contracts have not been signed yet, but we can tell you that
the Company is planning to run 95 15-second commercials per week
on the Major Financial Related Television Networks.
In addition, major campaigns have also been planned for print media,
which will also be in the household names that are financially related.
In all, the $1.5 million which will be spent over a six week period
beginning the first week of October will create 148 million Ad
Views in a six week time frame.
Marcus New, the President of StockGroup.com has been a frequent
guest on CNBC, CNNfN, Bloomberg Radio, Investors On-Line, and
many other fianancial shows. He has also been a speaker in front of
the New York Society of Security Analysts, which was rebroadcast on
NBC's Private Financial Network.
In mid September, unveiling Road Shows are planned for New York, San
Francisco, Toronto, and Vancouver. Marcus New will also be making
numerous guest appearances on TV and radio to promote the existance
of the site.
Their existing site has already gotten a fair amount of favorable
publicity. It was rated the #1 Investment Site by Lycos for a 17
month stretch, and it was also picked as the Microsoft Investment
Site of the Week.
The introduction of the New Community will generate a great deal of
publicity for both the site and the stock.
Comparable Companies and Valuations
The following is a table of companies and their valuations that we can
compare to Stockgroup.com.
Company
Annual
Revenues
Annual Profits
(Loss)
Shares
Outstanding
Market
Cap
FinancialWeb
FWEB
$160,000
($-1,268,000)
4.9 million
$34.3
million
Marketwatch
MKTW
$19.3
million
(-$16.7
million)
12.2 million
$383.1
million
Mediaconsult.com
MCSN
$2.51
million
(-$6.3
million)
28.1 million
$225.2
million
theStreet.com
TSCM
$12.8
million
(-$22 million)
24.5 million
$455
million
Stockgroup.com
SWEB
$6 million
(-$2 million)
9.6 million
$28.8
million
A quick look at this table leads one to conclude that Stockgroup.com
is clearly the most undervalued stock listed above. In addition,
Stockgroup.com has been profitable and has financed its initial growth
by generating revenues. Once the capital was raised to take
Stockgroup.com to the next level, only then were losses incurred.
TheStreet.com is our favorite comparison. The company is annualizing
at $12.8 million and lost $22 million over the last four quarters. Yet,
the market still places a $455 million valuation on the Company.
Based on June's financial results, Stockgroup.com was just under $2
million behind theStreet.com in annual sales, while only losing 1/10th
as much money, yet has a market value of only 5% of theStreet.com.
If Stockgroup.com can obtain 25% of the market valuation enjoyed by
theStreet.com, the stock will be trading at just under $12 per share, a
400% increase from today's levels.
Current Financial Condition
As of Stockgroup.com's June filing with the SEC, the company had
$8.6 million in assets, of which $8 million were in cash, receivables, and
short term investments.
Stockgroup.com had approximately $1 million in short term payables,
leaving shareholders' equity of $7.4 million. This qualifies
Stockgroup.com a NASDAQ listing, with the exception of the $4 stock
price.
In fact, back on May 19th, Stockgroup.com filed an application for a
NASDAQ listing. The application was subsequently withdrawn when the
stock fell below $4 since the Company didn't meet the minimum listing
requirements.
All of Stockgroup.com's financial statements can be found by clicking
here. Any review of their financial condition reveals a company that
already has the financial capability to launch its business plan and
meets the minimum qualifications for a full NASDAQ listing. The only
thing left is a $4 stock price for thirty trading days. If this is achieved,
investors at the current level will enjoy a 33% return on their
investment.
Conclusion
The valuations being enjoyed by companies like theStreet.com and
Marketwatch might seem ridiculous. The market believes that
theStreet.com is worth nearly $1/2 billion based on $12.8 million in
sales and $22 million in losses. Marketwatch is trading at $4/10 billion
coming off 16 million in losses on $12.3 million in sales.
Internet Investors understand why these Communities can trade at
such strong valuations. These Companies are all growing
exponentially. Investor allegiance is being created. More eyeballs are
looking at these sites and using the resources every day.
Traffic on these virtual streets is growing. Their content is prolific
enough for investors to need daily. Advertising revenues are
increasing, and fee based subcription services are beginning to
generate substantial revenues.
People will become more sophisticated and selective about the
communities they choose to frequent.
There are 27 million small and microcap investors that have been
completely neglected by the larger more exposed Internet companies.
No one has commited the resources required to provide a quality
community for these investors. Just last year one of our editors was
watching an interview with the CEO of a dental laser company. The
stock had appreciated from $2 to $23 over the previous several
months, and the interviewer at CNBC kept asking the CEO how he
could justify the current market value of the Company.
As we were watching the interview we couldn't help wonder why
CNCB didn't interview this CEO when the stock was $2. That is
when we would have liked to known about it.
If we had heard about it at $2, it would have been very powerful to
immediately go to a financial community that could provide us with
everything we needed to know about the Company in one quick stop.
This tool does not exist today, but it will in the middle of September,
and investors will go there.
Today, Stockgroup.com trades in relative obscurity. The high profile
nature of their new site will inevitably bring new interest into the stock,
and if a NASDAQ listing can be obtained, this will open the doors to a
whole other world of capital.
We remind you again- If Stockgroup.com can obtain 25% of the
market valuation that theStreet.com enjoys, the stock will trade
400% higher than it is today. Stockgroup.com is enjoying nearly as
much in revenues, and much lower losses. Their new site and
enhanced content will be introduced in several weeks, and it will
contain 40 times the current content with approximately 20 contributing
editors in New York, San Francisco, and Vancouver. Consider this one
seriously for the speculative end of your portfolio.
Links to Free Downloads
1st Net and InterVu Audience Manager Software
InterVu EyeQ Multimedia Manager
Disclaimer
The OTCjournal.com Newsletter is an independent electronic publication
committed to providing our readers with factual information on selected
publicly traded companies. All companies are chosen on the basis of
certain financial analysis and other pertinent criteria with a view toward
maximizing the upside potential for investors while minimizing the
downside risk, whenever possible. All statements and expressions are
the sole opinions of the editors and are subject to change without
notice. This profile is neither an offer nor solicitation to buy or sell any
securities mentioned. This newsletter is owned by SSP Management,
Inc, a wholly owned subsidiary of 1st Net Technologies, Inc ("1st
Net"). While we believe all sources of information to be factual and
reliable, in no way do we represent or guarantee the accuracy thereof,
nor the statements made herein. The editor, members of the editor's
family, and/or entities with which they are affiliated, may own stock in
and have other financial dealings with the companies who appear in the
publication. To that degree, this newsletter should not be regarded to
be an independent publication. SSP Management, the owner of the OTC
Journal, has been paid the following fee by Incite Marketing Group
acting on behalf of Stockgroup.com: $50,000 in cash, 40,000 shares of
restricted stock which will not become free trading until at least August
of 2,000, and 100,000 options with an excercise price of $4. The
OTCjournal.com critiques may contain forward looking statements
relating to the expected capabilities of the companies mentioned herein.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE
DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED.
INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH
DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS
PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND
MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE
EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.
We encourage our readers to invest carefully and read the investor
information available at the web sites of the Securities and Exchange
Commission ("SEC") at sec.gov and/or the National
Association of Securities Dealers ("NASD") at nasd.com.
We also strongly recommend that you read the SEC advisory to
investors concerning Internet Stock Fraud, which can be found at
sec.gov. Readers can review all
public filings by companies at the SEC's EDGAR page. The NASD has
published information on how to invest carefully at its web site.
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