WBN Update>>
Columbia Capital (CLCK 4 1/4 EBB) Takes A Hit, WBN Explains All, Cyberstation WBN-CLCK On the Way!!!
WBN is continuing its due diligence on CLCK in the process of building cyberstation WBN-CLCK. It is scheduled to be up late next week or early the following depending on when we can free up Webmaster Compton from demands on his time related to building a new website related to our Y2K channel, Westergaard Year 2000.
CLCK got clobbered down 40% this past week upon announcement that BestBank of Colorado was being taken over by the FDIC. It happens to be CLCKs largest credit card processing account. Hmmm... that's the bad news.
The good news is that CLCK will continue to process the BestBank accounts for the FDIC until they are sold to one or more other institutions after which it may or may not continue to process the accounts depending on who buys them. The buyer may wish to take the business in house, may wish to leave it with CLCK, particularly in the even the buyer does not have processing capacity, or the economics may be such as to lead a buyer to want to move its existing portfolio to CLCK. Since the BestBank portfolio is substantial, CLCK will be in a strong position to add to it on competitive terms it would seem.
Whatever the circumstances, it will take a good six months before the business is moved if that is to occur. Meanwhile, there are some large pieces of new business coming on stream. A contract to process debit cards for a chain of 3500 check cashing stores could be very large. Assume, for the sake of analysis, that each store adds 10 debit card accounts a week, that would translate to 140,000 new processing accounts a month which would double the scale of CLCK's processing business in 5 months -- we estimate it presently at 600,000 accounts.
That ties in neatly with a bit of worms eye analysis from our trip into Abilene two weeks ago -- a chance meeting with a salesman looking to sell CLCK a $3mm Swiss mail sorter. What better sign that the Company is gearing up for a large increase in its core business? $3mm smackers would represent a very large commitment for CLCK, surely not taken without conviction that the business would be forthcoming.
Keep in mind the big picture here which is CLCK as a Y2K Millennium Bug investment play with legs beyond 2000. WBN estimates that CLCK can grow ten fold between 1997 and 1999 as banks and other credit card issuers rush to outsource non-core activities in order to focus on what's most important which is getting themselves Y2K compliant and that the business will remain outsourced even after the Y2K brouhaha is resolved.
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