Fralex, I met Monday with J. Bennett, Chairman/CEO of SLEU...
for over one hour at their Fort Lauderdale headquarters, to ask a few questions about the Company plans and future prospects.
1) The team: Mr Bennett is a high powered, down to earth, executive with excellent knowledge of the Internet industry. He is also the president of an Internet consulting firm, Direct Digital Communications. As a direct result of his expertise, he was approached by Yucatan Holdings, the purchasers of Sleuth to run and build up the operation with optimum efficiency (he is proud of the fact that everything is organized in such a way, that it only take four people to operate the site, which means very low overheads). He is not rewarded by way of salary, but he has been issued a number of shares, which gives him a powerful incentive to work and increase their value. The other players are Sally Elliott who constantly maintains the site which is hosted by UUnet. I mentioned concerns that the site needed more frequent upgradings and he promised to look into it. To complement the team, there is also Tom Taule, Secretary/Treasurer and Mitch Patchnik.
2) The Business Plan: nothing is simpler and more straight forward! On February 11th, Sleu announced that "unique user" counts had increased 81%, from 400,000 end of December to 725,000 end of January. "Unique user" numbers are the most reliable way to value a search engine site. The "value" of a "unique user" goes from about $100 at the low end (GO2net) to about $1000 at the top (Yahoo). SLEU is doing everything in its power to increase this number and expect to have over 2 Millions "unique users" within 5 months. At the low end valuation, this give a market cap of some $200 Millions, or $46.50 per share! There is already some serious interest to buy out SLEU, but it is a little too early yet, when the "unique user" numbers and, thus the Company valuation, are growing so quickly.
3) Cash on hand: the CEO reports that they have all the cash they need to carry out their plan to its logical conclusion. In addition, they have a one Million line of credit, should they need it, which is unlikely, given the thriftiness of the operation.
4) Revenue: although the company is not yet profitable, there are several sources of solid income: advertising, percentage on credit card transactions and percentage of e-commerce sales. However, the thrust is less on net income generation than on increasing traffic.
5) How to increase traffic?: there are a number of new site expansions to be released within one month, or so: music connection, financial information, co-branded computers, e-toys, etc... I suggested an alliance with a company, such as e-Games (ROMT), that provide the ability to test games on site, followed by purchase and download. It should be a good way to increase traffic and Mr Bennett promised to look into it.
6) Conclusion: Having read and pondered certain posts, I was rather sceptic about SLEU. However, I am a business man and I could not see anything wrong with their Business Plan or the management. I have little doubts about its chances of success within the time frame indicated of 5 months, certainly before year's end, baring a major catastrophy. I went in frowning and came out smiling. I must admit that I was and remain favorably impressed. The CEO is clearly not a hypster or a PR type. He has figured out the whole business and the anticipated outcome quite well, since his final reward will depend on it.
The foregoing is my understanding of the conversation and my own opinion.
Regards, F. Goelo + + +
PS: the connection with SJIG is that it owns 1.5 Millions shares of SLEU. Assuming that SJIG assets and liabilities are in balance, the ownership of SLEU shares would give SJIG's shares a value in excess of $2.00. Yet, the last close was at 63 cents. |
