BIDS - ****STRONG SELL/SHORTSELL Rec***
BIDS has a number of very troubling problems for long investors, including;
1. Huge Float
2. Significant Ongoing Losses
3. Insignificant Working Capital
4. Significant Future Dilution Needed for Financing
5. Over-represented Revenues
6. Warrants/Options etc. Available For Sale
OVER REPRESENTED REVENUES
Revenues for BIDS are reported based on the gross value of a product that is sold via their auction site. For example - they sell a camcorder for $1,000, the show gross revenues of $1,000.
In reality, BIDS sees approximately 3% (gross revenue) from such product sold. Thus the 1998 Gross Revenue of US$ 13 Million was actually revenue to BIDS of approximately $US 390,000... That is Three Hundred Ninety-Thousand...
Also note below, BIDS admits to selling a good deal of product at or below market prices...
MANAGEMENT'S DOUBTS
BIDS Management Admits In Investor Meetings Doubts About Ability of Their Auction Business Model To Succeed... We agree...
HUGE FLOAT
edgar-online.com
Page 27...
<<<The Common Shares may be sold in the United States as set forth below. As of April 14, 1999, there are 49,594,468 Common Shares outstanding. Of these shares, approximately 46,437,622 Common shares will be freely tradable immediately upon the effective date of this Registration Statement, excluding those shares held by "affiliates," as defined in rule 144 ("Rule 144") under the Securities Act. Shares held by affiliates and the remaining outstanding Common Shares may be sold from time to time in accordance with Rule 144 (such shares being referred to herein as "Restricted Shares") or, if applicable, may be sold in accordance with Rule 701 (as defined below). In addition, as of April 14, 1999, there were outstanding options and warrants to purchase an aggregate of 1,396,896 Common Shares. Sales of substantial amounts of the Company's Common Shares (including shares issued upon the exercise of outstanding options and warrants) in the public market could have a materially dilutive effect on the prevailing market price of the Common Shares and the ability of the Company to raise equity capital in the future.>>>>>
<<<The following table shows certain information as of April 14, 1999 with respect to the beneficial ownership of Common Shares by the Company's executive officers and directors as a group...
All Directors and Executive
Officers as a Group (12 persons) 3,511,850>>>>
edgar-online.com
SIGNIFICANT LOSSES - INSIGNIFICANT REVENUE
Page 17....
<<<<History Of Operating Losses; Accumulated Deficit and Negative Cash Flow
The Company has not earned profits to date and had accumulated losses of Cdn $27.7 million as at December 31, 1998. For the year ended December 31, 1998 and the year ended December 31, 1997, the Company's net loss was Cdn $18.7 million and Cdn $6.7 million, respectively. The Company intends to continue to invest heavily in marketing and promotion, development of its technology, business-to-business auctions and other areas of its business. As a result, the Company believes that it will incur substantial operating losses for the foreseeable future. The Company's operating losses in 1997 and 1998 were attributable, in part, to the Company's promotional pricing strategy under which products were sold below cost or at significantly reduced profit margins. While the Company began to limit this policy during the fourth quarter of 1998, the Company continues to sell a limited number of products at significantly reduced margins and, in the future, may from time to time continue to use promotional pricing programs in connection with the introduction of new products and services, in response to competitive pressures or for other business reasons. The use of such promotional pricing strategies may have a material adverse effect on the Company's profitability. There can be no assurance that the Company will earn profits or generate positive cash flows from operations in the future, or that profitability, if achieved, will be sustained. The success of the Company will ultimately depend on its ability to generate revenues from its auction activities in amounts sufficient to permit the Company's operations and development activities to be financed by revenues instead of external financing. There can be no assurance that future revenues will be sufficient to generate the required funds to operate the business profitably. See "Management's Discussion and Analysis of Financial Condition and Results of Operations.">>>
All Comments Are The Express Opinion Of The Author...
Cheers Steve |
