Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Anthony@Pacific who wrote (1678)	12/28/1998 10:36:00 AM
From: HiSpeed	Read Replies (3) of 122087

Breifing.com on SKYM (they were laughing at 20): SKYMALL (SKYM) 12 9/16. This will be today's hot e-commerce stock. A company widely known for its catalogs on airlines, Skymall (SKYM) says that 1998 Internet sales will be about $2.1 million. This is not very much for a company that will do about $65 million in business this year. However, it is more than the $300,000 posted last year, and fourth quarter Internet revenue is expected to be about $1 million. The stock is bid at 20 this morning. Also boosting the stock is the fact that the CEO of SKYM is scheduled for an interview on CNBC this morning at 9:45 ET. What could be better than putting out a press release about strong e-commerce sales and having your CEO on CNBC? There are several questions that Briefing.com would certainly like to see asked of the CEO. How exactly do Internet sales fit into plans for a company that primarily gets its sales from airline passengers? What percentage of sales will be generated from the Internet over the next five years. Right now, it is only about 2 1/2%. And, how much will Internet sales really add to the bottom line the next couple of year? After all, profits were down the first three quarters of this year. CEO's are generally very good at providing upbeat answers, and Briefing.com has no doubt that SKYM will look good in response to these types of questions. But investors should also ask themselves these questions, as well as: is SKYM really worth 60% more today simply because of this press release? Of course, the answer many will give is that it is not investors that are driving the stock price today, it is day traders. That is certainly true. SKYM is simply today's e-commerce stock to play. But ultimately, the value of the stock will have to depend on whether these Internet sales really promote the bottom line for SKYM. And at 20, SKYM trades at a very pricey 76 times trailing earnings for an established company that does 2 1/2% of its revenue on the Internet, and has had profit declines of late.

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