Well Zed,
You have to also looked anecdotally at what has transpired
regarding financing, in that hitherto TIGI hasn't
had to draw from it's agent at what would now be
unfavorable terms.
Understanding how an agent works, and how this
relates to how much money may still be available
in this less favorable environment, hasn't
been an issue since apparantly one of two things
has occurred.
1). The basher point of view- No money has been
drawn because it isn't available or worse yet never
existed from the IB which is the agent that sollicits
interest from investros.
or
2). No money has been drawn down thus not necessitating
the disclosure of the agent until any increment has
been required. No money has been required for possibly
several reasons including the burning through some of GS's cash,
revenues from Affinity, possibly additional revenues
from promotions not entirely accounted for in the 3q,
and the lessened need for equity due to the non-acquisition
of RIMC.
This link is the company point of view on the subject
ragingbull.altavista.com
Regardless, I'd like to remind you what sector you're in.
The numbers of TIGI you cite, in this sector are relatively
very minor to the many, many cash burners that no
longer have the financing available for their 25, 35,
100 mill annual burn rates.
Moreover, Affinity's data base and business should benefit
significantly from alliances with Coca Cola and Pennzoil
plus possibly other corporations therefore increasing
business from what are now nascent relationships..
increasing business and the bottomline.
Thus your analysis doesn't take into account Affinity's
potential for growth which generated supposedly over $25 mil
without the benefit of these corparate partners providing
data base work, et cetera.
Finally, you have to remember that this isn't a "dot.com"
pure play. What Coca Cola and Pennzoil hope to achieve
is not cd's sales or search site participants.
First Coca Cola and Pennzoil want to use incentives to
make their brands the preferred choice of product to
buy OFFLINE. (Eg. Joe Six Pack goes to buy motor oil,
and decides to buy Pennzoil rather then Vasoline becuase
he loves basketball and is now surfing the net anyway
checking out all the porn sites. Just the chance to
win free tickets or merchandise tips him toward Pennzoil
products...or Coke instead of Pepsi).
Second corporations like these two want
to know more about who is buying their products so as
to market subsequent campaigns targeted to these people.
When data is managed and extracted patterns
are determined about the age, location, names , sex
of people who buy the products. The initial registration
is just the introduction. Subsequent promotions and tie
ins build the relationship online to better understand
the consumer's buying habits to better market product
to these consumers to get more rev's from each customer.
Enhancing sales offline and gathering info
about the consumer are the primary funstions
of a marketing company.
At this stage, I personally think TIGI would be better
off adapting its b-model away from selling goods from
its own site for slim margins, and use it's card
type products and corporate relationships to drive traffic
to other etailors to reduce the advertising costs
of what hitherto have been competitors.
Such promotional coordinated corporate/online relationship
would be service contracts with down payments and
performance incentives.
Moreover Tigi could structure a percent of sale offline
for a buy through as sort of a offline (card) to online
affiliate buy through program in conjunction with a more
traditonal online affiliated approach all the time piggy
backing the corporate partner's advertising saving the
partnered dot.com its major cash burner (ie. traditional
direct advertising)...
Taking a "both/and" approach rather than
an "either/or" one regarding online and offline
economies makes TIGI function as the marketing
or "advertising" conduit for enhancing both online and offline sales.
Plus if tigi uses its card and promotion models for more
than its own products, tigi has a wider and more infinite
array of clients making it much more similar to
LNTY than Amzn except with a Fortune 500 clientel
rather just a dot.com one.
z
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