Individual Investor is all over BWT. Today's spike around 10:00 may be related to an e-mail that went out to II Online subscribers with a link to the article below. The stock dropped just as fast as it took off, now trading below yesterday's close. I just signed up to II Online yesterday, and it may be a good source for nimble daytraders to ride spikes up and down.
iionline.com
UPDATE: BriteSmile Shines on News of Joint Venture
iionline.com
Staff Writer: Craig Schneider (6/3/99)
BriteSmile (AMEX: BWT - Quotes, News, Boards) shares jumped by as much as 48% this morning, after it announced a major deal with Orthodontic Centers of America (NYSE: OCA - Quotes, News, Boards) to offer its advanced teeth whitening procedure through Orthodontic Centers' 491 locations in the U.S., Mexico, and Japan.
Under the agreement, OCA is receiving an option to acquire 300,000 shares of BriteSmile common stock at Wednesday's closing price of $11.06 and the venture will begin establishing OCA-BriteSmile Whitening Centers through 10 Orthodontic Centers locations this month, with additional expansion through OCA over the course of the coming year.
Each OCA location is expected to have up to six BriteSmile teeth whitening systems. BriteSmile makes money via selling the whitening gel to the dentist, leasing the proprietary equipment, and receiving a fee of about $260 per procedure. The procedure, which lasts roughly an hour, costs about $600.
Since we last featured BriteSmile in mid-May, shares have slipped from $15.25 back down to around $10 before today's news. The stock was recently at $14.69.
Today's announcement speeds up the process for the company to expand into new markets. In addition to operating associated centers in Denver, CO, and Louisville, KY, BriteSmile has opened up centers devoted to its teeth whitening in Beverly Hills, Irvine, Pasadena, and Walnut Creek, CA.
'This venture affords an enormous growth opportunity for both companies, combining the strengths of each to broaden the customer base of both OCA and BriteSmile,' noted BriteSmile Chairman Anthony Pilaro in a press release. 'OCA can now offer the best in both teeth straightening and teeth whitening, providing end-to-end service all in the same location.' OCA shares are up 6% to $12.75.
On Wednesday, BriteSmile announced a new associated center in Houston, TX and the appointment of John Reed to the position of chief executive officer. While not really involved with the OCA announcement, Reed told IIOnline that the move won't change the company's strategy of developing new centers in major metropolitan markets. 'We look at it market to market,' says Reed. 'OCA centers are in minor markets so [the deal is really] a matter of critical mass.'
In late May, BriteSmile International, the Dublin-based subsidiary of BriteSmile, announced a joint venture agreement with Mejiro Precision Inc. of Japan to introduce the whitening system to the Japanese market. It will be two-thirds owned by BriteSmile.
Bottom Line:
With 1.2 million people spending money to whiten their teeth in the U.S. alone, BriteSmile's strategy seems right on the money.
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