Can someone explain why this stock went up today? Is it just internet fever? People losing their reason? And did someone actually upgrade this stock? Give me that analysts name so I can be sure to take the opposite side of his recommendations.
You know, I've said some bad things about CYSP. I've always thought it would end up a bug splat on the internet windshield. But when I saw that Furby figure, it stunned me. And I don't even own the stock.
To have a store selling thousands of items, and have one freak item account for 60% of Revenue, that's scary. If that doesn't set off ear-splitting warning bells in an investors head, he's gotta be a cadaver. Well, unless they come up with one hell of a big selling Easter bunny doll, you know what's happening to revenues next quarter.
Revenue estimate cuts on the way after earnings. From Briefing:
CyberShop International Inc. (CYSP) 10 3/4 +5/8: --UPDATE-- Needham & Co. maintains "hold"
rating on online retailer following pre-announcement of Q4 revenue results; revenues of $3.4 mln
represents a 15% shortfall from estimate of $4 mln; leaves estimates unchanged, but anticipates lowering
revenue projections for Q1 and full-year following the release of Q4 results.....
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CYBERSHOP INTERNATIONAL (CYSP) 10 3/4 +5/8. "CyberShop International, a leading online
retailer, today announced its fourth quarter sales were approximately $3.4 million, more than four times
1997's fourth quarter sales of $847,000." Does that sound like an "earnings warning" to you? Didn't
think so. But that's exactly what it was. Investors who purchased CYSP shares yesterday at the open are
probably still scratching their heads attempting to figure out why the stock fell more than 15% from its
early morning high, on a press release that would have normally sent this stock screaming. According to
Needham & Co analyst Dalton Chandler, the $3.4 million in revenues CyberShop expects to report would
fall approximately 15% below his $4.0 million estimate. In Briefing.com's opinion, the most disturbing
number that CYSP revealed was that sales of Furby's accounted for approximately 60% of the quarter's
revenues. Which raises the question: What the heck is the comany going to sell next quarter now that
most of the children who wanted a Furby found it under the tree on Christmas morning? When the
company reports final Q4 results, investors are likely to discover two more alarming figures:
disappointing gross margins and a wider-than-expected operating loss. CyberShop spent a mint this qtr
marketing the Furby doll in the weeks leading up to Christmas. This eagerness to draw consumers to its
site was also evident in the agressive pricing tactics the company employed this quarter. CE Unterberg
Towbin is not waiting on the final numbers to begin reworking its projections. Based on the information
revealed in CyberShop's "pre-announcment" yesterday, the firm is cutting its 1999 revenue estimate from
$16.9 mln to $11.1 (-345) mln and widening its FY99 loss estimate from $1.09 to $1.27 per share.
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