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BIKR to announce new website tomorrow.
TAUB TALK: The Next Hot Internet Stock?
Psst! Want to know the next company to announce its
internet strategy?
Bikers Dream (NASDAQ: BIKR).
Never heard of it? How could that be? It closed
Monday at $2.56 on the NASDAQ Small-Cap
Market. So, it now has a whopping $14 million market
cap and it trades nearly 38,000 shares per day.
However, life as an obscure listing should change later
this week when the company announces its internet site.
And, are you sitting? The company expects the site to
make money within one month. That's what they insist.
What is Bikers Dream? It makes and sells the larger
heavy-duty motorcycles. Its Ultra Cycles division
makes eight different models. The company then sells
them through its five owned and operated Bikers Dream
Superstores, 35 independently owned Superstores and
35 independent Ultra Dealers. The bikes sell for
between $16,000 and $25,000, much more than
Harley-Davidson (NYSE: HDI)bikes.
The company has turned around from a money-loser to
a money-maker since Herm Rosenman took over as
chairman and CEO more than a year ago.
In the third-quarter of 1998, which ended in
September, Bikers Dream earned nearly $603,000 on
$9.7 million in revenue. Last year, it lost $858,000. For
the nine months, revenue swelled 87% to $22.7 million
while net income came in at nearly $163,000.
Ah, but what about the internet? Does it plan to sell
these pricey bikes on the internet?
Sort of. As early as Wednesday, the company plans to
announce that it is launching its internet
site-www.Bikers-Dream.com. This is an extension of its
current Superstore business, which peddles its
proprietary-made parts through its retail outlets, as well
as its catalogue business. The company also plans to sell
merchandise, clothing such as T-shirts and other stuff
that bikers crave. Visitors could also buy a bike on the
set, but the company doesn't expect to sell many this
way.
Rosenman figures that the heavyweight cruiser business in general generates
$7.2 billion in revenue per year, of which Harley owns 40%. This breaks
out to roughly $2 billion in new bikes, $700 million in used bikes and about
$4 billion in parts. So, more than $2 billion in parts are up for grabs each
year for the non-Harley folks.
But, Rosenman isn't just staking out the parts and accessories business. He
wants to be 'the' site for bikers. 'We will also offer motorcycle chat
sessions,' adds Rosenman. 'We want all of the aura of the biking lifestyle
(and allow visitors to) participate. We will be the only one to do
e-commerce (for heavyweight cruisers).'
He will even offer prospective bike customers on-line credit applications
and then provide instant approval (or denial).
In conjunction with the web site announcement, as early as next week the
company plans to announce a marketing agreement with iMall (NASDAQ:
IMAL), the online shopping portal which last week announced a marketing
agreement with AT&T (NYSE: T).The idea is that iMall visitors will be
directed to Bikers-Dream.com.
When will Bikers-Dream.com make money, if ever? 'We will make money
a month after it's up,' Rosenman predicts. 'Our parts have super high
margins which will take care of (the site's) capital costs.'
How hot can this be? For one thing, this is no PinkMonkey.com. And just
look at what happened on Monday when Active Apparel Group
(NASDAQ: AAGP), a clothing manufacturer, announced its internet site.
All its stock did was zoom up from $1.25 to $15.13, before retreating to
around $11.50.
Looking further out, Rosenman hopes to spin off his manufacturing
company.
Are you ready, day traders? |
