ECMV profiled by Internet Stock Review!
Here's the writeup from ISR:
E Com Ventures.com (a net incubator) and the launch of the Incubator Stock Review !
Okay, as promised, we have launched the Incubator Stock Review and we now have our first new Watch List company. Unlike the Internet Stock Review, we will be coming out with new additions to the Watch List throughout the year, rather than in an Annual Watch List. At least for this year.
incubatorstockreview.com
What we have found, for our first addition to the list, is an absolutely, positively unbelievable find. No joke.
We signed them as a client, but could only get an option for 50,000 shares at $5.00. You may find it hard to believe (at least to us) that we would work so cheap, but after to speaking to the Chairman at length, we backed down from our original request for options to buy 200,000 shares. Mr Lekatch (the Chairman) got us so excited about the long term potential of the company, we decided it would be best to take what we could get, rather miss out altogether. We will
however be buying in the open market at the same time as everyone else is tomorrow morning, to get a larger stake.
Importantly, at 7:30 (10:30 EST) Tuesday morning, (as in an hour "after" the market opens) they will be presenting at the Cruttendon Roth Institutional Conference (which we are attending) in Laguna Niguel, CA. We attend the conference every year which is heavily attended by institutional investors (mutual funds, money managers and hedge funds). We estimate that there is probably about $100 billion dollars worth of buying power among the various "suits" floating around this conference. So...kids, we have about an hour to an
hour and a half jump on them. Heart be still.
One notable success story from the conference, which was on our 1998 Watch List, was an unknown company at the time called InterVu (ITVU), which ran from our Watch List addition price of $8.50 to $135. If we are so lucky to have a similar move in E-Com Ventures, we stand to make a tidy $6,500,000. So maybe an option to buy 50,000 shares isn't so bad after all.
bigcharts.com
E Com Ventures has sales (near $200 million), they have a small amount of shares outstanding (9.7 million) and a minuscule float of only 2.7 million shares. They have a proven track record, in that they've done their first spin off (which went from $7 to $45 in less than six months) to a market cap of $337 million. And get this, the market cap is of E Com Ventures is a mere $45 million. Heart be still. No one has heard of them (have you?) primarily due to a recent name change.
First a little about the Incubator Stock Review. While it has it's own
website, it should be considered a sub category of the Internet Stock Review, much like the very successful Music/Internet Watch List. It wasn't until this year (or in the last 6 months) that there were enough names to create a sub category of Incubator companies. After the operating (and stock market) success of CMGI (and later ICGE) there is now a universe of at least 32 Incubators (publicly traded) that we have uncovered. Much thanks in advance, to CBS MarketWatch who
gave us 10 names.
A nifty thing about the site is links to both publicly traded Incubators and private Incubators. Also for your surfing ease, we have aggregated links to some of the top news providers on the Venture Capital industry such as Upside, Red Herring, The Industry Standard, Internet.coms' VC Watch and the National Venture Capital Association. Lastly we have links to 10 Venture Capital Associations. We will continually expand the list to the biggest and best, so as not to become another "2000 links" type site.
Initially we'll cover the progress of the Incubator Stocks in the Internet Stock Review newsletter. To date Internet Incubator stocks have been bedy, bedy good to us. First, there was CMGI (CMGI) which increased from $1.81 to a high of $163 (market cap from $443 million to $39 billion), Dynamic Media.com (DIMG) which increased from $2.12 to a high of $7.25 (market cap from $10 million to $43 million), Rare Medium (RRRR) which started as a web design firm which increased from $4.50 to a high of $54 (market cap from $100 million to $2 billion) and finally Venture Catalyst (VCAT), which was added to the Watch
List a few weeks ago and which increased from $8.75 to a high of $21 (market cap of $41 million to $99 million).
Anyway, on to E Com Ventures (ECMV). As is standard, please remember that the Internet Stock review does not issue buy or sell recommendations. No price targets or stop loss targets will be forthcoming. We will however be closely reporting on E Com Ventures progress from a corporate standpoint...
We, in typical fashion will get right down to the meat of things. While we encourage you to read all of the press releases and government filings by the company, the story hasn't yet been well told. Here is an example of what we mean. The company currently describes itself as "intending to develop, acquire, guide and support e-commerce ventures by providing technological expertise as well as a platform for creating, expanding, cross-marketing, improving and
promoting member companies."
Say what ?
This is how we see it. The company is running 289 stores selling nearly $200 million a year worth of merchandise (perfumes) every year and decides to "spin-off" it's newly formed Internet division. Cruttenden Roth, Pennsylvania Merchant Group and H.C. Wainwright handle the IPO spin-off called Perfumania.com at $7 per share last September. E Com Ventures pockets $6.5 million in the deal and keeps 4,000,000 shares. Not a bad days work.
E Com Ventures next sells 2,000,000 shares to Alta Limited ( a European investment firm) for $12 million. Another nice day. Alta additionally gets an option to buy 500,000 more shares from E com Ventures for $8 per share or another $4 million. So we have $6.5 million and $12 million and another $4 million coming in down the road. Is their much more we need to tell you at this point ? Well of course there is. E Com Ventures still owns 1 million shares of
Perfumania.com (AMEX: PF). And a funny thing happened on the way to the theatre. Perfumania suddenly takes off on a tear and trades to $45 where it closed yesterday ! Hello.
stockpoint.com
Is this one of the best kept secrets on Wall Street ? Quite possibly so. Adding to the confusion is that Perfumania.com recently changed it's name to Envision Corp (AMEX: EDV), so we had to dig just to find you a chart (the one above) which covers the price action of the spin-off from $7 to $45. Thanks to Stock Point for the chart.
So to the meat of things. The story is just beginning to unwind. What's next ? Only time will tell. But remember, you heard it here first. Tell two friends. Oh and did we mention the book value is $3.65 per share. We're not making this up. How good are we ?
Recent News:
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Hoovers Profile:
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Yahoo Profile:
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StockPoint Profile:
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Hoovers Chart:
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Yahoo Chart:
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StockPoint Chart:
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Balance Sheet:
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Income Statement:
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