Have a look at this IPO (GPW:VSE) thread started Canadian Company!!!
Canada StockALERT IPO "Hidden Gem"
Subject: ** Canada StockALERT **
Date: Thu, 03 Jul 1997 18:15:37 -0600
From: stockmaster@grill.sk.ca (Danny Deadlock)
To: stockmaster@grill.sk.ca
* NEW IPO ON THE VSE TODAY HAS A HIDDEN GEM IN A U.S. $1.6
TRILLION INDUSTRY *
Group West Systems Ltd.
GPW:VSE Security No. 306260 Cusip No. 398904 102
July 3 Close $2.80
Issued 5.3 Million
I/R: Frank Port 604-473-2132
<>http://www.groupwest.ca>
We delayed our short holiday today to issue this report tonight as we feel
a new IPO which opened for trading today on the VSE may provide another
opportunity to capitalize on a very hot story in the Tech Sector. What
appears today to be an IPO for a successful Information Systems company is
much more than what appears on the surface.
Last month when discussing Net Nanny we made brief mention of a VSE listed
company (Forecross - FRX.U) that had a market cap. of $200 million but
sales of only $3 million in the past 6mths. This was as a result of being
in one of the hottest industries around where it is almost impossible to
find a public company that does not trade with a market cap. of $100
million plus. Last year forecross ran from $3 to approx $25 and has since
settled around $15 cdn with 12 million shares out. Canadian public
companies in this industry are very difficult to find but there are several
on Nasdaq trading with huge market caps.
So what is all the fuss about ? As reported in Canadian Business Magazine a
few days ago... "The desperate drive to solve the two-digit date conundrum
is creating a mainframe gold rush. Without the fix, when the year flips
from '99 to '00, computers will assume that its now the year 1900. The
expected cost of the cleanup ? U.S. $1.6 trillion worldwide... With a
possible shortfall of 30,000 programmers in Canada alone".
Today GPW opened for trading at 2.05 on a couple thousand shares but
quickly ran to $3.05 before trading almost the entire day between 2.65 and
2.90 as employees who were allowed minor amounts of stock at $1.10 finally
started to sell (total volume today 282,000). We expect stock to be
available at reasonable levels for the next few days but then beyond this
it is difficult to determine what will happen as there is very little stock
available and at some point if buying continues strong but selling
disappears, the stock could have a dramatic rise in price. Of the 5.6
million fully diluted, the President holds over 3 million under a 36mth
pooling agreement which will keep the stock from entering the market,
except for very small amounts over the 36mth period.
The majority of buying today came from one particular Blue Chip brokerage
house and it would appear that very little retail buying was present as
very few small investors or institutions are familiar with the company or
its prospects (yet). We have heard the company will have a full slate of
news releases throughout the summer which may include very high profile
board appointments, contracts and possible acquisitions and expansion.
Check out the website <>http://www.groupwest.ca> to further conduct your due
diligence but we can point out a few very important aspects of this company
that lead us to believe they offer tremendous future earnings potential.
1) Revenue to the end of 1996 was over $6 million without any of the Year
2000 technology being employed (new aspect of their business in 1997).
2) The company has been in business for over 20yrs and is highly respected
with approx 80 employees in B.C, Alberta, Saskatchewan, Manitoba,
California and Washington
3) Group West is a Blue Chip Business Partner with IBM and has exclusive
rights to a software program designed to handle the Year 2000 problem on
all AS/400 computer systems in Canada and the Western United States. In
Canada there are approx 5000 AS/400
mainframe computers and 7000 in California alone.
4) Gartner Group Consultants has estimated that a typical mid-size company
could spend as much as $3-$4 million in personnel and computer resources to
make the changes - large companies and government could spend ten times
that or more.
5) BellSouth and several Major Chemical companies are very satisfied
customers of Group West who have offered their names as references for
future clients.
6) Timing is becoming critical for many companies as it is a known fact
there will not be enough technical resources to cope with this worldwide
problem.
7) The company is one of the largest and most successful of its kind in
Western Canada and has a broad development environment, being able to
handle AS/400 systems, UNIX, Windows, Novell, Progress, Oracle and MS Access.
8) The Year 2000 issue alone is one of the hottest areas in the entire
technology sector with market capitalizations running at astronomical
levels based upon future earnings potential. With GPW's reputation,
association with IBM, and one of the Premier Tools in the Industry for
solving these problems, the stock price potential is terrific.
We expect developments to happen fairly quickly over the summer months so
will be following Group West until at least September.
Group West will compliment Net Nanny very well as they are both in a very
hot sector and will both offer some tremendous news in the weeks ahead if
everything develops according to schedule. Today the Financial Post
provided excellent support for NNS through an article that featured Net
Nanny and the entire issue of Internet Software Filters. It will not be
long before the Year 2000 issue will also begin to garner serious media
attention and with or without this exposure, companies that are addressing
this issue will continue to be in high demand and command very high market
capitalizations.
Danny Deadlock
Editor - Canada StockALERT
DISCLAIMER: <>http://www.canada-stockalert.com>
The principals involved with Canada StockALERT have established strong
corporate
and investment liaisons throughout North America over the years with
particular emphasis on the resource industry where we are directly
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employed by the corporations we comment on, nor are we security brokers. We
act solely as an informative source. Equity coverage is for INFORMATIONAL
purposes ONLY and may not be construed as a buy or sell recommendation.
The materials contained are from sources we believe to be reliable and
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making any investment decisions.
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