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Strategies & Market Trends : Roger's 1998 Short Picks
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To: RockyBalboa who wrote (15586)11/19/1998 3:16:00 PM
From: Pravda  Read Replies (2) of 18691
 
MALL is a short term long -- don't short this

uBid runs an online auction for computer products and other consumer goods. The nearest competitor to Ubid is ebay. Currently, ebay has a roughly $6 billion dollar market capitalization. MALL has a roughly 260 million dollar market cap, and will own 80.1% of uBid after the IPO.

From uBid's S-1/A filed 11/18/98:

"The Company is currently a wholly-owned subsidiary of Creative Computers, Inc. (the "Parent"). Upon completion of the Offering, the Parent will own approximately 82.3% of the outstanding shares of Common Stock (80.1% if the Underwriters exercise their over-allotment option in full). The Parent has announced its intention, subject to satisfaction of certain conditions, to divest its ownership interest in the Company in 1999 by means of a tax-free distribution to its stockholders but in no event prior to 180 days after consummation of the Offering. Only holders of the common stock of the Parent will receive shares of Common Stock in the tax-free distribution. Such distribution may adversely affect the market price of the Common Stock."

I know this thread thinks EBAY is ridiculously overvalued, but shorting MALL is like shorting EBAY at one twentieth of the price.

I am long MALL. This surprises me also.

Pravda
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