SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Creative Computers(MALL)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Labrador who wrote (401)11/21/1998 1:11:00 PM
From: the dodger  Read Replies (1) of 1634
 
Can everyone suffer thru one more analysis?

First let me say, I am "long" MALL...and am in the process of trying to decide whether to stay that way. I bought in as a momentum play about 2 weeks ago...having seen the stock move from 9 to 16+ on a massive increase in daily volume. What first brought MALL to my attention was Ebay...and I think the knee-jerk reaction when you first "discover" MALL/UBID is to compare it to Ebay....whose market-cap is completely into the stratosphere when you look at their price/sales ratio. ( And that's a large part of the reasoning as to why I am still long...the Ebay hype.)

But with that said, I think Mr. Hua is right -- or at least to some extent...the better comparison for MALL is ONSL...a much closer business model to UBID...both sell refurbished computer gear via internet auctions. I also mostly agree with him on his valuation of MALL minus UBID...I come up with 10 bucks...he says 8....so let's use 9.

ONSL is currently selling at 27....which is 2.81 X trailing revenue...and revenue has grown 523% on a yr-to-yr basis. Here Mr Hua and I part company a bit. He wants to value UBID at a similar 2.8 X revenue...at least I believe that's what he's saying, (sorry Tom if I'm putting words in your mouth).

But what I think what needs to be done here is to go back a year on ONSL...when it was then selling 4.27 X revenue on a somewhat higher growth rate...about 800% ...and coincidentally...roughly about what I project UBID to be growing at currently.

I'm projecting 1998 UBID revenue to be about 60 million...so that would give them a market cap of 4.27 X 60 MM = or 256 million...or roughly 25 bucks a share. So I say MALL is worth about .72 X 25bucks ...plus the 9 bucks from its other business...and that puts us at roughly 27 a share...which is just slightly higher than where it's at today. But wait...it gets a bit better.

If UBID revenue grows at a similar rate from here to the year-ago ONSL rate... 523%...that would put 1999 UBID revenue at an estimated 313 million...so THEN we use ONSL's current 2.81 X revenue figure to figure "fair market-cap"...which would give us a target of 881 million ...or about 88 per share of UBID....so my rough 1999 "target price" for MALL is....72% of 88 = or 63.36...plus about 10 bucks ( that's a 10% gain over current value) for underlying business...for a total of 74.36 a share.

Conclusion: Downside from here looks rather limited...maybe 20-30%...but upside could be in the 200% range. So there's still a chance we get some "IPO internet-hype" for a big, quick profit...but there's value there even if we don't.

I'll shut-up now.

....."the dodger"
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News