From: hotpicks (richman@laol.com)
Subject: HOT Stock Pick
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Newsgroups: misc.invest.stocks
Date: 1999/02/28
The Stock Investor Newsletter
February 26, 1999 5:00 PM EST
Major News issued by Global DataTel (February Buy Recommendation)
Strong Buy Recommendation: Global DataTel Inc.
Ticker Symbol: GDIS
Current Price: $9.75
Target Price: $35.00 to $45.00 per share
Past 10 day High/Low: High: $13.25 Low: $7.68
Shares Outstanding: 7.5 million
Recommendation Issued by International Market Advisiors
MAJOR NEWS RELEASE ISSUED BY GLOBAL DATATEL INC.
Global DataTel to Raise $50.0 Million in Cash
Today, Global DataTel released news that they have signed a letter of
intent with Dirks and Company, Inc. to raise $50.0 million in cash for
Global DataTel. This funding would allow Global DataTel to complete
several additional acquisitions as well as fund Global DataTel's Latin
American On-Line. If you recall, Global DataTel is in the beginning
stages of undergoing a major marketing campaign for their internet
portal Latin American On-Line (eLAOL). Just as American On-Line (AOL:
$89.00 per share) underwent their advertising campaign by mailing out
hundreds of thousands of free AOL disks, Global DataTel will be doing
the same. With the completion of this financing, Global DataTel will be
able to reach a far greater audience.
With the announcement of today's financing, Global DataTel should become
one of the dominant Internet Service Providers (ISP's) to Latin America
just as American On-Line is one of the dominant ISP's in the Unites
States. In the previous 12 months alone, AOL's stock has gone from
$12.00 per share to over $90.00 per share.
One significant factor in the deal signed by Global DataTel and Dirks
and Company, Inc. can be found in the financing package. Dirks and
Company, Inc. has agreed to fund Global DataTel with a convertible
debenture that would convert at a stock price 25% to 50% above the
current market bid price. (This price would become definitive on the
Effective Date once closed.) What exactly does this mean? If the
Effective Date were today, (the stock is currently trading at $9.75),
that would mean that the group of investment bankers and investors would
be purchasing stock in Global DataTel at a minimum price of $12.18 per
share and a maximum price of $14.62 per share. Obviously they must feel
that Global DataTel's stock is going to rise significantly higher in
price.
The bottom line is this: Once fully converted, a group of investment
bankers is willing to buy $50.0 million worth of stock of Global DataTel
at $12.18 to $14.62 per share.
A few other factors to consider. Let us look at 4 companies that
recently raised between $45.0 million and $76.0 million to see what
happened to their stock prices. Please note that these 4 companies were
all Initial Public Offerings that were completed within the past 45
days.
1) Viagene Inc. (Ticker: VIGN) This company went public on 2/18/99 and
raised $76.0 million. The financing was completed at $19.00 per share.
The stock has traded as high as $52.75 and is currently trading at
$46.00 per share. The company lost $-1.46 per share in 1998 or -$26.2
million. The company had gross revenue of $16.2 million.
2) Webtrends Corp. (Ticker: WEBT) This company went public on 2/18/99
and raised $45.5 million. The financing was completed at $13.00 per
share. The stock has traded as high as $38.00 and is currently trading
at $25.00 per share. The company had a profit of $0.02 per share in
1998 or $219,000. The company had gross revenue of $8.01 million.
3) Verticalnet Inc. (Ticker: VERT) This company went public on 2/10/99
and raised $56.0 million. The financing was completed at $16.00 per
share. The stock has traded as high as $55.42 and is currently trading
at $41.00 per share. The company lost $-0.93 per share in 1998 or -$5.7
million. The company had gross revenue of $1.2 million.
4) Marketwatch.com (Ticker: MKTW) This company went public on 1/15/99
and raised $46.75 million. The financing was completed at $17.00 per
share. The stock has traded as high as $130.00 and is currently trading
at $67.00 per share. The company lost $-1.38 per share in 1998 or
-$8.25 million. The company had gross revenue of $7.03 million.
What do the numbers look like for Global DataTel? (This assumes
completion of the financing and includes pro-forma numbers for 1998.)
Global DataTel Inc. (Ticker: GDIS) Dirks and Company to raise $50.0
million. The financing will be completed at 20% to 30% above market
price. Global DataTel had a profit of $0.38 per share in 1998 or $3.0
million. The company had gross revenue of $29.0 million in 1998.
What will be the future of Global DataTel's stock price. In 1998,
Global DataTel had larger revenues, earnings per share, and net earnings
than all 4 companies mentioned above. Yet, Global DataTel's stock is
far less than all of the above companies. Time will tell. Then again
this news has only been public for less than a few hours.
We have enclosed today's news release for your review:
Friday February 26, 12:14 pm Eastern Time
Global DataTel to Raise $50 Million
Company To Use Proceeds for Latin American Online Network and
Acquisitions
DELRAY BEACH, Fla.--(BUSINESS WIRE)--Feb. 26, 1999--Global DataTel, Inc.
(OTCBB:GDIS - news) announced today that it has signed a letter of
intent with Dirks & Co., of New York, a well-known securities firm, to
raise $50 million through a convertible bond issue, which conversion
price will be at a 25-50 percent premium to the stock price at the time
of the offering.
Richard Baker, Chief Executive Officer of Global DataTel, said proceeds
from the offering would be used to market the company's Latin American
online network, e-Latin American On-Line (eLAOL), scheduled to be
launched in March 1999, as well as for future acquisitions and to fund
the company's growth in general.
"This funding will provide Global DataTel with the strength to
capitalize on the tremendous opportunities that exist for our company
with the new Latin American network we are establishing, and for our
growth as an IBM Business Partner in this region," Baker said.
Global DataTel, a first tier IBM Business Partner, is the Latin American
leader in medium to large system integration projects. Global also
partners with Compaq, Dell, Hewlett-Packard and Cisco, and is a
Microsoft Certified Solution Provider, Lotus Premier Team Provider and
is an exclusive distributor of JBA International, an E.R.P. solution
company.
Global offers continent-wide information system expertise in such
diverse areas as inter/intranet implementation, e-commerce, enterprise
resources planning and Y2K testing and compliance. The company has
offices in Managua, Nicaragua; San Jose, Costa Rica; and Barranquilla,
Bogota, Cali and Medellin, Colombia. The company is headquartered in
Delray Beach, Florida.
For additional information, visit the company's web site at:
www.globaldatatel.com.
This release contains forward-looking statements that are made pursuant
to the safe harbor provisions of the Securities Litigation Reform Act of
1995. Forward-looking statements involve the known and unknown risks and
uncertainties which may cause the company's actual results in future
periods to differ materially from what is anticipated.
Contact: MARTIN E. JANIS & COMPANY
Media Contact: Hal Schweig, 312/943-1100
or
Investor Contact:
Bev Jedynak, 312/943-1100
All statements and expressions are the opinion of The Stock Investor
Inc. and are not an offer or solicitation to buy or sell any securities
mentioned. While we believe all sources of information to be factual and
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