Will trading on the AMEX lead Datalink.net higher?
Date written: Jan 10, 2001
By: Lou Ambio
Datalink.net (AMEX: DLK) offers premium personalized financial and lifestyle consumer wireless information services
and wireless information enterprise solutions to businesses, and they are benefiting from first mover advantage.
The company is very proud of their technology, and it appears they are correct in their assessment of it. Their
proprietary Web-to-Wireless platform utilizes intelligent agent technologies to filter information and deliver specific
content to wireless devices, and to bill, manage and support the customer account. Furthermore, the company’s
XpressLink platform combines real-time data feeds, the World Wide Web and wireless communications.
The stock has changed exchanges more in the last few months than most companies do in a lifetime. In fact, the
company has gone from the AMEX to the NASDAQ back to the AMEX, why you ask? The company moved to the
NASDAQ for better name recognition, but when they got there all they found was increased volatility in its stock.
Therefore, they went back to what they felt was better execution of stock trades in the specialist-supported systems of
the American Stock Exchange.
Recently, Datalink.net acquired Cross Communications, Inc., a wireless data communications solutions provider,
which will both enhance the company’s offerings and their customer base. Cross Communications develops software
used in enterprise messaging including wireless applications for network management messaging and monitoring,
field work force communications, help desk operations and Internet messaging and monitoring. Currently Cross
solutions are utilized at over 1,000 locations including such large companies as AT&T, Motorola, Lucent
Technologies and AOL
Early in September, Datalink.net announced the completion of the acquisition of Simkin, Inc. of Gainesville, Fla., a
producer of pharmaceutical and medical software tools with on-site and computer assisted training programs. This
acquisition will allow DLK to move into the healthcare market and Anthony N. LaPine, Datalink.net’s chairman and
CEO, commented, "This acquisition is a major step in our Company's strategy to dominate key vertical sectors of the
wireless economy. Our patented wireless technology, combined with Simkin's innovative software and 18 years of
close relationships with the world's most prestigious hospitals and pharmaceutical manufacturers, gives us
unparalleled reach into the healthcare market."
Furthermore, in October, DLK acquired WaresOnTheWeb ("Wares"), an established provider of e-commerce
solutions to leading retailers, distributors, and manufacturers. Wares provides Internet Retailing, Internet Distribution,
m-Commerce, and Supply Chain ASP solutions to various vertical markets. Wares also competes in Application
Service Provider Enablement and e-Business consulting. Strategic partners and alliances include SAP America,
Unisys, Microsoft, Cable & Wireless and Checkpoint. Anthony N. LaPine, Datalink.net chairman and CEO,
commented in the PR announcing the acquisition, ”WaresOnTheWeb has established a reputation for implementing
advanced data communications solutions to enterprise customers. We look forward to a successful integration of
WaresOnTheWeb's leading technology and wirelessly extending Wares solutions".
In early January DLK made another acquisiton that sounded promising. The acquisition was of the eFulfillment
company Five Star Advantage, Inc. Five Star Advantage provides "brick and mortar" companies in a number of
vertical markets with eFulfillment capabilities and eMarketing solutions. Five Star Advantage generated revenues of
approximately $6 million last year and was profitable.
Though everything seems to be going well for DLK investing in the company is still a gamble as the
company is still in infant stages. However, their revenues are growing very quickly. Revenues of 2Q01 of
$777,000 were more than double the 1Q01 revenues of $281,221 and reflect the Company's continuing
progress in penetrating its targeted vertical markets. Revenues for the six months ended September 30,
2000 totaled $1,058,000, as compared to $820,000 for the prior year six-month period. Like I said though,
the company is in their infant stage as their CEO Anthony LaPine stated in a PR, "In FY 2000 the company
dedicated its resources to building a strong infrastructure for the enterprise market. Armed with $17 million
in additional cash and three new top executives, Datalink.net is moving aggressively to market its wireless
enterprise solutions."
On October 12, the company’s board of directors have approved a program to buy back up to 1 million shares of its
common stock. "The stock repurchase program addresses the Company's significantly undervalued stock which
provides a historic buying opportunity," said Anthony LaPine, Datalink's chairman and chief executive. However, it
appears this plan backfired as it was announced on January 9th they had filed an S-3 shelf registration statement with
the Securities and Exchange Commission for up to 3 million common shares under Rule 415, which allows shares to
be registered without committing to their immediate sale. The capital will be used for expansion purposes.
Finally, an investment in DataLink.net is definitely not a sure bet, but if they are able to successfully create
a name for themselves in the W-ASP market they could prove to be a big winner. Analysts definitely think
so, as after their last earnings release H.C. Wainwright reiterates coverage of DLK at a Strong Buy and
CIBC World Markets Wedbush Morgan reiterated their coverages of the company at Buys, with price target
$30 and $32, respectively. It doesn’t hurt to note that at slightly over $2.50 per share at a market
capitalization of only $38 million there is plenty of upside to be had.
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The above article appeared on one of the message boards...written for an investment newsletter? Has anyone heard of Lou Ambio?
This is a company I've followed for the last year, which IMO has tremendous potential...it has been compared to an AETH/SVNX..but never had an IPO. The article left out some important positive factors for DLK (soon to be Semotus Solutions with their new name change) - their seasoned management team, and their relationship with Chase in developing their Global Market Pro (for the financial markets), their patented technology, a change from B2C to B2B, their strong Engineering background, and many of the revenue producing agreements they've made lately. I believe Chase paid $30 a share for 800,000 warrants in DLK, when they developed the Global Market Pro product. IMO they will have increased earnings when they report on 2/14. A possible "turnaround" stock...but definitely not for the "faint of heart" with it's price swings! |
