Observations on the Wall Street Journal Interactive Article:
1. "Its valuation has soared even though ProNetLink has just $379,227 in assets, no
earnings and no revenue. The company is less than a year old, has just six employees,
and its only product was introduced just last Friday. But the company has used an
aggressive promotional campaign to spread the word about its service."
We knew all of this already. And we have definitely covered the difficulty of trying to value internet stock.
2. " One of its first press releases, in October 1997, announced that 'ProNetLink permits
its members to advertise their companies to up to 40 million Internet users daily.' The
claim about the site's marketing reach, made six months before the Web site was
launched, was based merely on an estimate of the total universe of Internet users. In
the week ended May 17, the company says, just 8,868 "user sessions" were recorded."
I'm sure the reference to 40M internet users was in the context of the potential of the internet, not an attempt to claim that PNLK would have that many users. And I thought the number of user sessions was quite impressive.
3. "Another ProNetLink press release, issued on May 8, says its subscribers would get
free access to Dow Jones News Service. The release also referred to content from
Dow Jones News Focus. "This feature alone makes the ProNetLink dollar-a-day
membership fee seem far too low," the release quotes Mr. Collardeau as saying at a
press conference. Dow Jones & Co., which publishes the news service as well as
The Wall Street Journal Interactive Edition, later the same day issued a release of its
own, saying no deal had been struck yet, and that full access to Dow Jones News
Service wasn't under consideration. This week, the companies reached a deal
regarding News Focus, a far more limited news service."
Actually, I went back and read the release, and it did indeed say Dow Jones News Focus.
go2net.newsalert.com
4. "Mr. Zagoren says a "significant" part of his compensation from ProNetLink will come
in the way of stock options. He says that in March 1999 -- one year after his contract
with ProNetLink began -- he will be able to buy up to 500,000 ProNetLink shares for
$1 each, and sell them at any time. "It's the incentive factor. They are saying, 'We're
at $1 today, where can you take us? If you do a good job, you deserve to make
money on that,'" he says.
Others could make a tremendous profit from ProNetLink stock, if it remains
anywhere near its current price. Mr. Collardeau purchased four million shares of the
company in August 1997 for $400, or one-hundredth of a cent each. Other members
of his family hold nine million shares, purchased at the same price. Even after the
stock's recent slide, at the close of trading Wednesday, Mr. Collardeau's holdings
were worth $14.3 million."
I don't know about this one. Is this out of line? |
