SPNW: a brief history Part 1.
by: silver_surfer_88 (M/the megaverse) 5/20/00 5:22 pm
Msg: 6865 of 7566
For our new readers.
SPNW was originally called Techwave , an electronic e-commerce company. Dwayne Walker , (formerly Microsoft?s General Manager SQL Server , Director of Windows NT and Networking Products, GM for Worldwide Sales and Marketing, and Director of the Solution Provider Distribution Channels, among other things), came in as a major investor, Chairman and CEO.
As the internet changed, so did Techwave. The NEXT BIG THING was becoming internet retailing, so Techwave bought and developed Shopnow.com. (This was when every internet e-tailer was a moonshot, sigh). Walker and co. set to work making Shopnow.com the best online mall it could be. Revenues came in the most part from advertising and payment for prominent placement for resident stores, as well as programs to target shoppers via e-mail campaigns and the like.
In September 1999, SPNW came public at $12. The stock reached a high around $25, traded for awhile around $20, skidded in March down to $10 (along with the whole tech sector). Contributing to this decline in price was a secondary offering, which priced at $14.50 and netted the company roughly $120 million in cash. Walker chose not to sell any of his shares on this secondary. Then at the end of March the restricted investors were unlocked, and the shares slumped further, into single digits.
During this time, however, SPNW was focusing on growth both internal and external. The company bought several companies including Speedyclick, bottomdollar, uBarter, FreeMerchant, and the property which was to become B2Bnow.com, among others.
1. Speedyclick, a site targeted at females, is now the 33rd most visited site on the net, with 11 million unique visitors per month, 15,000 new members per day, and was recently listed as the #3 auction site.
2. bottomdollar, a product comparison search site, is making 6 million product searches per month.
3. uBarter, a B2B bartering site, is about to ratify its merger with SPNW.
4. FreeMerchant, owns an award-winning e-store development technology which allows merchants to design their own attractive, functional e-store for FREE. However, transactions and other fees apply.
5. B2Bnow.com is a website listing over 700,000 businesses in 63 categories in a bunch of countries.
CONTINUED
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SPNW: Significant Numbers
by: silver_surfer_88 (M/the megaverse) 5/20/00 5:25 pm
Msg: 6866 of 7566
PROFITABILITY: The company expects to be profitable in Q4 ?01. This is an improvement over the most recent expectations by analysts of Q2 ?02. In its brief reporting history, SPNW has bested public expectations pretty handily, so I personally expect sooner than Q4 ?01.
CASH: At the end of Q1, the company had more than $120 million in cash. Q1 revenues $18.7 million versus $13.4 million in Q4 ?99. Q1 loss $19.3 million. With revenues expected to continue running stronger ever quarter, and costs holding or decreasing as a pct. of revenue, ABSOLUTE LOSSES are expected to decline every succeeding quarter until NET PROFITABILITY in Q4 ?01 (or sooner). Management has declared cash on hand to be sufficient to Q2 ?02.
GROWTH: (Excerpted from lefty?s previous post, thanks lefty)
Q1 2000 - Q4 1999 - Q3 1999
Total ShopNow.com's Networks Visits
55,359,804 - 21,461,497 - 7,845,172
Total ShopNow.com's Networks Page Views
189,173,139 - 51,064,643 - 18,748,378
Total Number of Leads and Orders per Day
134,914 - 124,020 - 59,942
Overall PC Data Rank End of Quarter
27 - 36 - 186
ShopNow Network Merchant Data
Total Number of ShopNow Merchants
61,000 - 48,000 - 37,000
Total Number of Premier Merchants
97 - 68 - 32
Average Revenue per Premier Merchant
$47,504 - $34,991 - $25,689
Business Commerce Network Data
Number of Business Commerce
Network Businesses 610,000 -- --
Average Number of New
Business per Day 1,100 -- --
Store Development Metrics
Total Number of New Store Development Contracts
8 - 5 - 4
Average Value per New Contract
$828,750 - $333,600 - $300,250
Efficiency Metrics
Salary Expense as a % of Revenue
48% - 60% - 68%
Marketing Expense as a % of Revenue
58% - 88% - 110%
Marketing Expense per Visit
$0.20 - $0.56 - $1.06
Premier Merchants include those merchants that contribute greater than $10,000 of revenue per month as shown below.
Platinum > $100,000
7 -- --
Gold $10,000 - $99,999
90 - 68 - 32
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SPNW: The FUTURE
by: silver_surfer_88 (M/the megaverse) 5/20/00 5:34 pm
Msg: 6867 of 7566
As my previous post showed, the growth in the core business is strong. The execution of the growth strategy has resulted in strong HITS GROWTH accompanied by MORE MERCHANTS, HIGHER REVENUES, and HIGHER AVERAGE REVENUES PER MERCHANT as well. Just as importantly, the GROSS MARGINS of SPNW are an astonishing 44% and rising. As opposed to companies like ONVI with NEGATIVE GM (they sell stuff cheaper than it costs them), SPNW keeps more of its dollars, and RISING REVS + LOWER COSTS = DRIVE TO PROFITS. I believe AMZN GM is under 20%, please correct me if I?m mistaken.
Now, in addition to the Shopnow.com flagship revenues, the various recent acquisitions of bottomdollar, Speedyclick, uBarter, and B2Bnow will ignite growth in the second half and beyond.
IMO, B2Bnow has the greatest potential. Currently it is a listing directory of 700,000+ businesses. Very soon, trading platforms developed for B2Bnow by Rightworks and Tradex/Ariba are expected to go live enabling these 700,000+ businesses to buy and sell from each other generating more high Gross Margin fee and transaction revenues for SPNW. Furthermore, the ad and placement revenue should be VERY JUICY as well. Walker has already stated that they have been approached by many companies looking to access B2Bnow?s client base.
Of course, barter has taken off with the web, and uBarter will take off with B2Bnow. This is a B2B application, and uBarter will benefit tremendously from exposure to B2Bnow clients, and vice versa. (I got extra hiking boots which I can trade for radio time, or hotel rooms, or airline seats, or paint, or accounting, or computers, or whatever 700,000+ businesses do). Ubarter gets a CASH fee based on the RETAIL value of the transaction.
One more point. One nice kicker is Shopnow?s holdings in escrow.com which some expect to come public this year having received additional SUBSEQUENT funding from the likes of Chase, PCCW, VerticalNet, and Softbank. If you haven?t heard of ALL these guys, you?re missing something special. AND SPNW has a 3-year EXCLUSIVE as escrow.com?s payment processing service provider. AND SPNW traded 208,334 shares of common stock at $12.00 per share to escrow.com in exchange for 50% of (i) 500,000 shares of escrow.com's common stock at purchase price of $0.25 per share and (ii) 2,000,000 shares of Series A Preferred Stock at a purchase price of $2.44 per share.
Not to mention this new broadband and wireless initiative which already has a significant un-named partner which has been speculated on this board to be AT&T or WCOM. I confess, I have no clue how the revenue stream or business model works for this arm of SPNW, but I guess we?ll find out soon enough.
OK FOLKS, we have a $250 million dollar stock with $100+ million in cash and securities. And all the businesses listed above. GO FIGURE.
ANYTHING posted by me is subject to factual or analytical error. However, over the course of several posts, no one has challenged any of my statements. I invite corrections to anything deemed inaccurate. Everything I posted can be found in public sources of information. I am not recommending that you buy this stock. Make your own decisions.
SILVER_SURFER |
