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Strategies & Market Trends : Pluvia's Fist.com - Pluvia's Plays & Portfolio
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To: RockyBalboa who wrote (448)11/23/1999 3:57:00 PM
From: xcr600  Read Replies (1) of 1766
 
From Briefing-

eBaseOne (EBAS) 8 11/16 +3/8: The bulletin board non-reporting company filed an S-1 yesterday to register stock. But eBaseOne will receive no funds from this registration. This is not an IPO. This little company went from $0.50 a share in July to $19 a share in early November, on the hype that it is an "ASP" company. We don't usually focus on bulletin board stocks, (particularly the non-reporting stocks that trade on bulletin board), but this story has some lessons in it. First of all, just plain avoid non-reporting companies. How can you possibly know what the stock is worth when you can't see its financials? Without financials you are only betting on the changing perceptions in the mind of other people. We know there are people who love this game, but unless you are confident that you know how to play it, be very cautious. Someone is always left holding the bag after the frenzied runup begins. Someone bought at $19. But before you dive into eBaseOne on the premise that it is one of the first Application Service Providers, check out the S-1. This company has no revenue history from the ASP business. They are reporting $653K in revenue, but it is all from their previous line of business. Second, they sold $9 million in equity just one week ago to investors put together by Cardinal Securities LLC. But this S-1 states that only $3 million of this equity is funded by this registration. The "reading between the lines" interpretation is that the 4.5 million shares being offered by the selling shareholders are coming from people who bought warrants one week ago for the equivalent of $0.66 a share. And they will be selling these shares at $8.00, or the current market price, as soon as the shares become eligible. A tenfold return in less than a month. And you thought daytrading was profitable. - RVG


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