Bull Market Report [DBCC] Weekend Update.
$$$$$ DATA BROADCASTING CORP., A DISCUSSION
"...Data Broadcasting (DBCC) was the most active stock on the New York Stock Exchange last week, falling 4.60 to $21.75 on 128 million shares. During the week it touched $50 a share. We announced the addition of DBCC to our Aggressive List on January 7th, a little over a week ago at $16.75 a share. We have received countless emails asking us what the company is worth? We will try to give you our opinion on this matter.
Data Broadcasting owned 50% of CBS Marketwatch.com before the IPO on Friday with CBS owning the other half. It is a web site that looks to have great potential due to the affiliation with the CBS organization which has lent its name and reporting muscle to the venture. On Friday, CBS Marketwatch was priced at $17, up from the preliminary price of $10-12 and the first trade was at $90. It subsequently reached $130 and closed at $97. Since CBS Marketwatch sold 2.75 million new shares to the public, Data Broadcasting now owns 38% and one can do the math on how much the company is worth to DBCC. The following numbers are approximate, not exact: MKTW has about 12 million shares outstanding so the company is worth over $1.1 billion. DBCC has 32 million shares outstanding so dividing this into their market cap and multiplying by 38% gives you $13 per DBCC share.
Data Broadcasting closed at $21.75 on Friday, down $9 or so. Why would the stock go down when MKTW was having such a great IPO? Good question – we addressed this in our Thursday report. Here is the quote:
However, don't expect that if the MKTW IPO is successful that DBCC will be guaranteed to go up. DBCC has had a great run this past week since we recommended it and added it to our Aggressive List just a week ago at $16.75. It closed today at $31, and some analysts are saying it is overvalued even in the low 20's. So who do you believe? These Internet stocks are RISKY investments without any solid earnings, and with a few disappointments, what goes up can easily come down. Be careful out there.
So let's review:
- We recommended the stock at $16.75 a week ago Thursday.
- The stock is at $21.75 now, an increase of 30% in a week.
- Our price target is $30 in twelve months and note that we didn't change the price target after it hit $50 last week.
- The CBS Marketwatch IPO was WILDLY successful, beyond anyone's idea.
- DBCC owns an asset that is currently worth $13 a share, so the rest of DBCC is worth $9 a share and a long term investor would hope that these two companies would grow over the next three to five years.
- Do you buy or sell here at $21.75 on Tuesday?
Only YOU can answer this question. Don't think we are going to give you all the answers in this forum. This is a newsletter in which we give OUR opinion, no one else's. We want you to think about these investments and make your own mind up after doing the due diligence, your homework. Good investing!..."
© January 16-17, 1999 bull-market.com |
