Bill Alpert, the journalist who writes the "Plugged In" column for Barron's, deals with LOAX in the May 3, 1999 issue: "One Internet Supernova, Log On America, Seems to Be Dancing With Some Dubious Characters."
Mr. Alpert notes that Concentric Network, a company with $30.0 MM in revenues for the quarter ending March 31, 1999, revenues that grew by 82% from the prior year, revenues derived from providing high-speed Internet connections to thousands of business customers across the company, is valued at just 13 times its annualized revenues. In contrast, Mr. Alpert notes, LOAX, which has recognized revenues of only $1.1 MM for the two years ending December 31, 1998, is being valued at approximately 225 times the last two years revenues.
Mr. Alpert further comments, "Several pundits have expressed their bafflement...Altogether, the Log On IPO garnered $22.1 million for the firm, which had nine full-time employees after seven years in business, and posted a loss of $422,000 on last year's revenues of $760,000. About 40% of these revenues went to fund compensation and loans to the Internet firm's 31-year old president, David R. Paolo, and to his father, Ray, a company vice president. With more than 2.6 million shares between them, the Paolos should be good for the loans, at least." |
