GNET Vs.MSPG Technical Analysis using Volume Patterns & Trading Bands marketgems.com
GNET is an excellent prospect for both takeover and in its potential for being a premier portal for the financial community. I would not be at all surprised if one of the major heavy hitter purchased this nice company. GNET is constantly adding to its list of acquisitions. It is the 13th most visited portal after geocities. We have two important factors now that can influence its rise.
1) the split and more upside before February 5, the earnings of NSOL which comes on the 10th and the earnings of MSPG which comes the 27th.. I think the next 2 weeks will be crucial for GNET.
ARticle in ZDnet January 21, 1999
Go2Net: Will profits now pay off long-term?
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Most Internet companies -- Amazon.com Inc. (Nasdaq: AMZN), Lycos Inc. (Nasdaq: LCOS), Geocities Inc. (Nasdaq: GCTY), Excite Inc. (Nasdaq: XCIT) et al. -- do just the opposite. The consensus strategy for Internet companies is this: pump up revenue, build brand and lose lots of cash. In an recent interview, one CEO asked, "If you were allowed to lose a dollar to build a huge brand wouldn't you do it?"
Good point. Who can blame these companies for spending big when Wall Street analysts substitute "losses" with "investing for the future."
To its credit, Go2Net, which operates the Silicon Investor site among others, is bucking this trend. The company reported first quarter operating earnings of $305,855, or 4 cents a share, on sales of $3.17 million. Including acquisition charges, Go2Net reported a loss, but who is going to complain?
So far individual investors love Go2Net. Shares (chart) have soared and the company just announced a stock split. The company said it will acquire selected properties to grow revenue. Go2Net is planning a "highly-targeted national advertising campaign" in March to grow the brand without sacrificing profits.
Just to be sure that campaign wouldn't hurt profits, we called Go2Net. "We are anticipating continued profitability," said a spokesman. The company is comfortable estimates for 1999. According to First Call, Go2Net is expected to report a profit of 24 cents a share for the year.
Unbelievable. Go2Net is making money.
Unfortunately, Go2Net's plan makes it an outsider. Should the company take advantage of the spend-now-make-money-later dynamic?
Institutions aren't on the Go2Net bandwagon because the company has come up the hard way. Only two analysts cover the company. There's a reason: Go2Net didn't have a flashy IPO or the glowing analyst coverage that goes with it. Go2Net went public in April 1997 and traded on the Nasdaq Small Cap Market. In August, Go2Net was listed on Nasdaq's national exchange.
If Go2Net were to go public today, it would have some big-time underwriters and would be a $300 stock.
It's ridiculous, but true.
So now Go2Net has to put up the so-called metrics to get Wall Street's undivided attention. Revenue growth was impressive, but still fell short of the $3.5 million reported by fledgling Xoom.com Inc. (Nasdaq: XMCM),which reported a loss of 29 cents a share. eBay Inc. (Nasdaq: EBAY) is profitable and reported revenue of $12.9 million in its latest quarter.
Go2Net's network had an average 8.1 million page views per day in December, compared to an average of 6.7 million page views per day in September. In terms of reach, Go2Net said it ranks as the 25th most visited site in December, according to Media Metrix.
The company had 290 advertisers in the quarter, up from 142 advertisers a year ago. The company also realized revenues from online subscriptions, e-commerce and technology licensing.
All of those figures are nice, but apparently aren't enough to get Go2Net into the Wall Street game. So now Go2Net has ramp up sales by a massive amount to get Wall Street interested. Maybe Go2Net should play along with the current formula, spend heavily to grow sales and take some losses.
With any luck, investors may actually get tired of Internet losses and put Go2Net on top. For all those old-school investors, however, Go2Net is a refreshing change. An interesting case study indeed. TDAIN |
