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Technology Stocks : E Loan Inc -EELN -- Ignore unavailable to you. Want to Upgrade?

To: KENNETH DOAN who wrote (181)	7/1/1999 1:16:00 AM
From: stockman_scott	Respond to of 817

<<Sorry, but I don't see the same picture that you guys are seeing. This is like saying that etoys worth more that Toy R Us>> Kenneth: Sorry you don't get it yet. I see you are an investor in XCIT/ATHM...now that's a richly valued stock with a lot of future expectations built into it. The "offline firms" are evaluated by traditional metrics....the online firms have low barriers to entry and are early movers and have great growth prospects...thus we see the difference in valuations between AMZN and Barnes and Noble...Tribune and Yahoo...eToys and Toys R Us...and now look at RBNC vs. EELN... Ann Arbor, MI based RBNC (Republic Bancorp) is one of the top 30 mortgage lenders in the country -- started by a family friend. They operate in over 25 states and their profits for the last 12 months were greater than E-Loan's sales <G>. Now lets compare market caps....RBNC has a market cap. that is around 1/4 of EELN's current market cap. Why? RBNC is evaluated using traditional metrics and does not really operate online yet. EELN is a pioneer in a very large marketplace. There is a premium given to a first mover (like a Yahoo). EELN's stock price is based on future expectations. EELN has a very scaleable business model and should be able to grow its customer base much more rapidly than a Republic Bancorp or a Countrywide. As long as E-loan develops a clear path to profitability they will be given a very high valuation. Of course some of the offline firms could become more aggressive online -- and I expect that they will. There is too much business that they stand to lose if they don't offer mortgages to customers using multiple channels. I still feel that EELN could become the Gorilla in the online financing arena -- and the marketplace will reward them if they execute. Now back to eToys vs. Toys R Us.... Recently, Toys R Us realized they were way behind online and needed to become very aggressive. What did they do? They formed a new joint venture with one of the BEST Venture Capital firms in the valley (Benchmark Capital -- the VC behind E-Loan and eBay <G>)...the plan is to start a separate subsidiary and launch ToysRUs.com in a BIG way. IMO, this is smart, very smart. They are partnering with one of the best incubators of web companies so they can really compete with eToys. They will leverage Toy R Us's brand equity and offline assets. Yet, they will form a new public company that is evaluated like a new media firm, go public and attract some of the best talent while they are at it. Watch this experiment. I have a feeling they'll give eToys a run for their money. I'm in E-Loan for the LONG RUN and have no concerns about the current valuation. If you don't agree with some of my comments that's OK...Wait about 3 weeks and we could be at a much higher price...AND Goldman Sachs will start to enlighten you (and the Fund Managers) about EELN's amazing future potential <G>. Good Luck Investing. Best Regards, Scott