AA,
I just read DK99's post on yahoo message board. It was a clip from AFFI's 10Q stating cash depletion rates. Simply put, doesn't this describe most Internet companies financials before they receive IPO proceeds. The fact that AFFI is using up existing cash for operations and is on a burn rate is nothing new for an Internet stock.
If you look at the way the Banking Industry is headed it is clearly headed for the net.
Large Participants in the brokerage industry like Merrill, Smith Barney, Goldman Sachs etc have completely missed the paradigm shift to on-line brokerage services. Allowing compnanies like E*Trade and Ameritrade to gain critical mass and take market share.
The same paradigm shift is in store for the banking industry. My assumption is that in a couple of years a large percentage of banking transactions, checking, deposits, equity lines, personal loans, etc will flow over the net. Already, established regimes like Citibank, Chase Manhatten, Bank America are slow to react to on-line banking. This is allowing companies like Net*Bank, Security First to gain critical mass.
At some point, probably very soon, upstarts like Net*Bank will scare the death out of the Chase Manhattens and they will be forced to react. Creating huge demand for the pix and axes. Upon reflection, a market participant can begin to see the market potential.
Unless AFFI's top executives can't manage a Dairy Queen, things should be fine.
Stated another way, if this company were to IPO monday morning, it would trade easily at $17.
Steve |
