ONSALE JAPAN to show numbers in 4Q earnings report!!!!
On May 15, 1998, the Company entered into a joint venture agreement with Softbank Corporation to perform on-line auctions for the Japanese market, resulting in the formation of ONSALE Japan K. K., which commenced operations in the third quarter of 1998. The Company's share of the joint venture is 40% and therefore, the Company accounts for this transaction under the equity method of
accounting and, as such, its share of net profits or losses from the joint venture are recorded against the initial investment. The Company's share of the initial investment, $2.0 million, was funded through a note from Softbank Corporation. The principal and accrued interest thereon is due in December 2002 (or earlier in the event of an initial public offering by ONSALE Japan K.K.) with
interest accruing at a fluctuating rate equal to the short-term prime rate of the Dai-ichi Kangyo Bank (1.5% as of September 30, 1998). This note has no right of offset against the Company's investment in the joint venture.
>>>>>As you can see, ONSALE owns 40% of this joint venture and their initial investment of $ 2 million was funded by Softbank with a note not due until December 2002. But if an IPO is offered for ONSALE Japan, it could be paid off sooner. But checkout the prime rate just 1.5%. So, we could expect to see 40% ONSALE JAPAN revenues and costs to show in 4Q earnings report. This alone will boost revenues growth much higher than previously estimated 13% over 3Q revenues. ONSALE stocked up on merchandise inventory during the 3Q ready to liquidate inventory during the brisk holiday e-shopping. Longs will be rewarded as early as 4Q earnings and beyond.<<<<<
FYI
HectorJohn |
