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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (14855)	8/30/1999 6:37:00 PM
From: gizmo&jack	Read Replies (1) \| Respond to of 108040

Don't know what the confusion is Mogul? Would like to compare IIJI vs. STRM & PASA & CHINA after this past weekend's Barron's article. While I feel badly for those who were in the last 3, I do not feel like it was underserved. This article was right on the money. I very rarely invest in companies without proven revenue streams. My quick and dirty evaluation method is as follows: I take quarterly revenues, multiply by 4 conservatively assuming flat growth and then look at a company's annual revenue multiple to its market cap. If an internet stock is around 10X, I do some serious dd. Using this methodology, one recognizes that IIJI is nothing like these other foreign internet plays and I believe has been unfairly grouped with them to this point. This will change soon imo and today was the first evidence of that. Let's take a look. IIJI had 2nd quarter revenues of $45MM; 45X4=$180MM. Market cap of $2.1B/$180MM = 11.67X. Close enough (remember, flat growth assumption is really ridiculously conservative). CHINA 2Q revenues = $2.4MM X 4 = $9.6MM. Market cap of $964MM/$9.6MM= 100X. A little scary. People really have to believe in phenomenal growth here. I know there are alot of people in China, but it's a 3rd World Country with a completely corrupt gov't. I'll pass. STRM 2Q revenues = $3.8MM X 4 = $15.2MM. Market cap of $2.2B/$15.2MM = 144X. Scarier still. Better growth potential imo (though some would disagree), but still too high a multiple for me. PASA 2Q revenues = $17,000 X 4 = $68,000 (whoa!). Market cap of $141MM/$68,000 = 2074X. Laughable. In sum, you have to feel pretty confidently that the growth prospects of CHINA, STRM, and especially PASA are tremendously greater than IIJI to even consider investing in them before IIJI. The funny thing is that I actually think the internet will grow faster in Japan than any of these other countries due to its much more highly evolved social and economic state. Just my humble thoughts, but if you want to invest in foreign internet growth, why not take the company that has clearly proven its viability already and is clearly the greatest bargain at present.