Did you all see this on EGRT? I'm really surprised about this one. Maybe the float is too big, LOL.
Internet based digital greeting & gift service
Greeting cards, a popular staple of traditional retailers, have joined the Internet
revolution. In 1998, electronic greetings were reported to be the 6th most popular
Internet activity, so demand is extremely attractive. eGreetings provides electronic
greeting cards and has an inventory of 4,400 greetings. In 9/99 alone, 3.4 million
greetings had been sent and the firm?s website had 9.6 million visitors making 98
million impressions. The firm has 7 million registered users and is branching into
gifts, making it an e-commerce play as well. Despite the apparent progress, this
is still a very young firm which is still emerging from start up.
While the greetings service is the "headliner", the real value of this firm is it?s
direct marketing ability. It has amassed a large and rapidly growing database of
consumer demographics. Consequently, we believe it will be valued as an Internet
direct marketer rather than just another e-tailer. That difference has extremely
significant valuation consequences. Recent IPO?s illustrate the market?s favor for
this sector. MediaPlex was offered on 11/19 at $12 and closed at $29, up 141.7%
the first day. It recently traded at $36.81, up another 26.9% in the aftermarket.
Exactis was offered on 11/19 at $14 and closed at $24, a 71.4% first day. It
recently traded at $26.25, up 9.4% in the aftermarket. Digital Impact was offered
on 11/23 at $16 and closed at $55.50, a 270% first day. It recently traded at $58,
up 4.5% in the aftermarket. Pre-offering demand is reported to be very strong, and
appears to reflect these favorable valuations. Despite the very weak fundamentals,
this firm appears poised to receive the benefit of the extremely strong direct
marketing valuations. Expect a first day in the 100+% range followed by modest
appreciation. |
