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Technology Stocks : AUTOHOME, Inc
ATHM 24.13+1.1%2:20 PM EST
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To: Michael P. Michaud who wrote (7494)4/8/1999 8:27:00 AM
From: Erik T  Read Replies (2) of 29970
 
From a post on 4/4/99:

>>>From high-speed Internet access to digital cable TV, demand for telecommunications services is booming in the Bay Area. But delivery of some high-tech offerings is being slowed by a decidedly low-tech problem: lack of blue-collar workers.<<<

The management of this company appear to be very good, as evidenced by their strong deals and large market penetration, and I suspect they will work very hard to get as many people on cable internet service as soon as is possible. But I do see this potential lack of skilled installers as a concern going forward. It is labor intensive to set-up ATHM service. AOL has 15 million subscribers and will likely continue to grow. ATHM has 330,000+ and will certainly grow at a faster rate, but to justify the current valuation it seems they need to grow their customer base by at least 100% to 200% a year. That would be 330,000--660,000--1.3 million--2.6 million--5.2 million. Then after 5 years they would only have around 10.5 million. How many workers need to be hired across the country so that they can install service for 5.2 million people in a year? Or is the current valuation reflective of ATHM's market dominance ten or fifteen years from now? (Which may still be reasonable)

Just some thoughts.

Erik (IMHO)

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