Why do you think so many companies want to get into this business?
If you believe the stories some of the shorts hype why would any company want a piece of the internet registrar business? Do you think AOL, AT&T, and the others see the HUGE potential in this business or are they just doing the government a favor?
Also, a review a ASENSIO's releases will demonstrate that they were predicting a $1-$2 fee from registry. Far below the $9 actually agreed to.
Some excerpts from Paine Webber's press release on 4/22/99, 7:08. The complete release can be reviewed on reply 990.
"NSOL has the distribution channel that currently generates 70-80% of new domain names. ...NSOL has over 4 million domain name registrations, a large defensible customer base, and a wide portfolio of value added businesses".
"The domain name registration market could potentially significantly expand in size. ...Even if the market is getting more competitive, it is also getting bigger with potential addition of new domain names, the international opportunity becoming competitive as well, and the ability to move more aggressively, Therefore, we believe even if NSOL sacrifices market share, in aggregate the overall opportunity for NSOL could be larger going forward."
"By virtue of .com,.org,.net NSOL has approximately 75% plus market share. If we assume that NSOL's approx. 160 partners and affiliates will register 20-30% of all names going forward, NSOL will still be left with approx. 50% market share. Not bad."
Per Keith Benjamin, BancBoston Robertson Stephens see reply 981
"NSOL's 4 million registered domain names only scratch the surface of an incredible opportunity. We believe this represents a handful of businesses whereas there is a much larger opportunity to capture every business in the world and every person in the world. We believe NSOL's growth will be dependent upon how extensively and how quickly the company can attract new people to register domain names. NSOL has done limited marketing to date."
IMO:
NSOL will be a huge benefactor of the marketing and sales these other companies will do at their own expense.
NSOL has a 6 year head start on these others firms.
NSOL has a very strong management team and major stakeholder (SAIC).
The government doesn't grant you a monopoly to develop something as important as the backbone of the internet then pull the rug out from under you. The relationship NSOL has with the government is very strong-contrary to what ASENSIO would have you believe. The fees that will be agreed upon in the future will be cost plus a reasonable fee. That's a SWEET deal!
NSOL has recently announced other products (Internet Directory, etc.) and is ideally positioned to launch them.
NSOL wants to increase it's authorized share volume to 210 million shares from 130 million for possible stock splits at it's annual meeting on May 18. CNET WWW.NEWS.COM April 16, 1999 6:05.
Lastly, consider these scenarios:
1. The company just can't compete and dies a slow death as the shorts would have it.
2. The company maintains it dominant leadership position in this lucrative business.
3. One of the competitors buy's it up. What do you think that would do to the stock price?
The momentum traders have taken this stock on a rollercoaster ride. Investors need to study all the issues and releases and decide for themselves where the truth is.
I'm putting my money on higher in the long run! |
