BIZZ just opened at 16 7/8. Assuming that the over allotment option is exercised, that gives them a market cap of approximately $110.0 MM. They are a ONEM clone with approximately 20,000 customers and pro forma 1998 revenues of $6.2 MM. At $110.0 MM, the customers are being valued at approximately $5,500 each and the company as a whole is being valued at almost 18 times revenues. This is at the high end of the range for U.S. ISPs. The pricing on this issue was very aggressive.
On the plus side, on a pro forma basis, they had positive EBITDA of $536,810 for 1998. ONEM had negative pro forma of $800,000 for 1998, though if I am not mistaken they reported positive EBITDA of approximately $750,000 for the first quarter. Management appears to be strong and they will have $8.0 MM to spend on acquisitions. In private market transactions, ISP customers can be purchased for two times revenues, or about $300-400 each.
I like the company, though it might be a bit pricey at this level. But what do I know, I think that LOAX should be trading at $5. Hope you got your allocation. JMHO. |
