HERE IT IS!!!
(just keep dem pumpin)
December 10, 1999 10:05
Joseph Charles & Associates Upgrades ZixIt Corp. To Strong Buy from Buy Rating
BOCA RATON, Fla., Dec. 10 /PRNewswire/ -- The following is being issued by Joseph Charles & Associates, Inc., a member of the National Association of Securities Dealers, CRD number
3949:
Joseph Charles & Assoc., Inc. research analyst David Weinstein raises his rating on ZixIt Corporation (Nasdaq: ZIXI) to strong buy and maintains his one year price target of $230. An updated report is scheduled for release the week of December 12, 1999.
ZixIt(TM) is the developer and owner of the ZixIt(TM) Digital Signature and encryption technology. On November 30, the Company made a general release of its advanced beta version of ZixMail(TM) followed by a series of announcements that the program has been adopted by such prestigious national law firms as: Haynes & Boone; Steptoe and Johnson; Akin, Gump Strauss, Hauer & Feld; and Munsch Hardt Kopf and Harr. The Company appears to be succeeding at their "hub and spoke" marketing strategy. (A partial listing of the firms' clientele will be included in our update report.)
ZixIt(TM) also announced an agreement with Matchmaker.com, one of the most highly trafficked websites. Matchmaker.com has nearly 4 million registered users and expects over 1 million of its members will make use of the ZixMail(TM) secure messaging application. They log new members at a rate of 250,000 users per month. These new users may act as catalysts to spread the use of the ZixMail(TM), both to their friends and business associates. ZixIt(TM) is also attracting the attention of the government. The Senate Republican High-Tech Task Force is taking a tour of the Company's Dallas facility today.
The pace of these announcements and their implications for ZixMail usage indicates ZixIt(TM) will be likely to exceed 10 million users by the end of calendar 2000. We have not yet modeled the ZixMail(TM) income statement because details on pricing various products are not available. However, if we assume $1/month per employee, then ZixMail(TM) could be on a run rate to generate $120 million in revenues by the end of calendar 2000 with expenses running under $20 million. This would yield an after-tax profit of $3/share. This excludes earnings from ZixCharge(TM), which we still believe has the potential to earn significantly more than ZixMail(TM). ZixIt(TM) has not yet announced financial partners for ZixCharge(TM). When it does, we expect a significant increase in ZixIt's(TM) market valuation. We expect shares in ZIXI stock should trade higher in the near term based on the significance of its ZixMail(TM) partners and as news of its alliances begin to reach a wider audience.
Currently, ZIXI has modest institutional holdings that would have to be increased significantly by Internet mutual funds if ZixMail(TM) or ZixCharge(TM) become industry standards. The stock price could also receive a boost by short covering. We estimate there are 3 million shares in the short position. The short sellers have bet that ZIXI will never have a product or customers. This week's news proves the short seller thesis is flawed. With a formal float of about ten million shares, and a trading float of six million, it will be interesting to see how the stock reacts to a combination of short covering and natural buying by fund managers.
Information and statements contained herein, other than historical information, should be considered forward-looking, involving risk and uncertainties. The securities referenced are speculative in nature and may not be suitable for your investment objective. Joseph Charles & Assoc., Inc. is a market maker in the securities of this company and may have a long or short position in the securities, its officers, directors and affiliates, and may maintain positions in the securities referenced which may change at any time without notice.
CONTACT: Joseph Charles & Assoc., Inc., David Weinstein, Director of Institutional Research, 561-391-9090, e-mail: institutional@josephcharles.com |
