15 Solid Reasons to Buy MSGI now. (Update III)
On or before May 15, CMGI will close its latest deal involving the sale of its treasured CMG Direct division to MSGI and then also taking a 15% stake in MSGI. In addition, CMGI is sending its Internet visionary, Ed Mullens, over to MSGI to become MSGI's new President. Here are solid reasons to buy MSGI now:
1. Explosive growth in direct & Internet marketing industry, $205 billion by 2001 ($153 billion in 1997)(See Zack's report on MSGI for more details; see also CMGI's home page news/facts @ msginternet.com);
2. Industry is very fragmented market with no powerhouse leader, YET; (MSGI is actively pursuing consolidation. The infomediary who becomes dominant in this market may have a $20 billion market cap within 5 years)(Don't underestimate the value and power of the next dominant "infomediary");
Read "Net Worth" by John Hagel.
amazon.com. MSGI is, in my opinion, poised to be that next great infomediary. At the heart of Hagel and Singer's solution is the "infomediary" that sits between the customer and vendor. For the consumer, the infomediary acts as a trustworthy agent who knows the needs and habits of the client. For the vendor, the infomediary is the holy grail of consumer behavior, a marketer's dream. The infomediary brokers client information to vendors in exchange for goods and services for the consumer. The result? Happy consumers, satisfied marketers, and a very lucrative business model that awaits those entrepreneurs and companies that are bold enough to embrace the idea. The authors painstakingly outline the challenges and opportunities of developing an infomediary business and peg the potential market cap of a dominant player at $20 billion by its fifth year of operation. This is us; this is MSGI.
3. MSGI's revenue has grown from $16 million in 1996 to $100+ million (annualized for 1999) MSGI's revenue grew 120% from 1997 to 1998 - this is explosive and MSGI has just begun; MSGI's almost 120% increase in revenue does not even consider the new revenue to be generated from the Stevens-Knox biz.yahoo.com and CMG Direct acquisitions biz.yahoo.com;
4. MSGI moving to Nasdaq Nat'l Market within next 1 1/2 months or less - and no doubt before June 7th, biz.yahoo.com; Regarding moving to Nasdaq National Market: - this will help make the stock options elegible, and margin eligible in time. This increases demand for the stock in the long run.
5. MSGI will become a $250+ million company this year (there will be more acquisitions and growth, J. Barbera has said so - dmnews.com - I believe Barbera will over deliver on this goal for a $350+ million, and MSGI's new President (who came from CMGI) responsibilities will include mergers and acquisitions. biz.yahoo.com );
6. MSGI will get major (well known) analyst coverage within next 2 months or sooner(stock will jump 6 - 12 points on this news, imho);
7. MSGI has two very credible strategic investors who have a clearly defined track record of investing in winners, they are: CMGI with 15% and GE Capital with 24%;(These investors will deliver more business and revenue to MSGI's doorstep, and GE is already doing this. Just look at MSGI's customer list in its most recent annual report. Also, CMGI will assist in management and business strategies going forward. Again, Ed Mullens, formerly with CMGI is to be the new MSGI President.
8. MSGI will close the CMGI (CMG Direct) acquisition on or before May 15, 1999. biz.yahoo.com This will result in another Press Release further emphasizing CMGI's involvement and confidence in MSGI (It is very obvious with Ed Mullens' appointment to MSGI President that CMGI is keenly interested in the success of MSGI! - Mullins will be heavily directing MSGI's focus to the rapidly expanding Internet.)
9. MSGI is still virtually undiscovered bc/ it is not yet listed on Nasdaq Nat'l Market and has no analyst coverage except from a Denver regional firm with a "strong buy." Again, analyst coverage will be initiated very, very soon, imho. (Plus MSGI already has a very small float - in reality probably less than 4 million shares);
10. MSGI only lost .37 last year on $51 million revenue. .31 of that loss was attributable to an non-recurring interest payment to GE Capital and approximately .02 of the loss is attributable to MSGI's MFI division which was spun-off majority interest)http://biz.yahoo.com/bw/990401/ny_msgi_1.html.
11. Along these same lines, EPS for 1998 reflected the same record-setting trend: a $2.48 improvement to end the fiscal year (1998) at a loss of .37, which consists of .31 loss associated with the GE-capital transaction and .06 was associated with operations (also, in its most recent earnings (2nd Qtr. 1998) MSGI posted only a .14 loss compared to a loss of .33 for the same Qtr. a year ago - an improvement of 58%) It is very conceivable for MSGI to turn the corner to profitability this year based on its improvement from 1997 to 1998; Net loss for 1998 was better than that in 1997 by an impressive $4.5 million;
12. In 4 more trading days, MSGI will be able to force GE Capital to convert its preferred shares(provided MSGI closes above $8 3/4 for the next 4 trading days, which is a given.) This means MSGI will not have to make any more interest payments to GE Capital. (Remember that .31 cents from last year.) MSGI will be headed straight towards profitability, which is almost unheard of for a company like this that is this young and enlarging its Internet involvement and presence. (Compare DCLK). (Also, GE's conversion will not have any dilutive impact on MSGI's EPS because MSGI had been including the GE preferred shares in their EPS ever since GE became an investor in Dec. 1997).
13. A somewhat different yet very similar and comparable company is DCLK which is trading at $125+. (post-split). MSGI for 1999 (on annualized basis) will generate more revenue than DCLK and 5x closer to making a profit than DCLK. (DCLK's growth rate isn't as great as MSGI's, and DCLK is going backwards relative to its profitability.) MSGI's growth is incredible and will grow even more rapidly from here - in my opinion. CMGI only selects and invests in companies with EXPLOSIVE growth. This is what MSGI has show and will continue to do, imho. In the past 3 months, alone, MSGI has signed 3 significant revenue producing deals with new clients: BreathAsure biz.yahoo.com; Broadway Giant biz.yahoo.com, and American Theater biz.yahoo.com;
14. Excellent management to boot, which explains why MSGI was invited to be a presenting company at the 1999 Alley to the Valley Conference a few weeks back in March of 1999 in San Francisco. alleyvalley.com
15. If MSGI is good enough for the likes of CMGI, who is taking a 15% stake in MSGI then you can be sure that MSGI is looking for a 10,000+ percent return, not just a $60 - $70 point gain. Think about it. If MSGI becomes a major player with a marketcap of $5 billion or the "dominant player" with a $20 billion market cap in 5 years, then we're looking at a range of $425 to $1525 stock in 5 years.
Do you now understand the huge potential here - the potential that CMGI recognizes?
This company is still but an infant, imho. |
