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Technology Stocks : Theglobe.com [TGLO] -- Ignore unavailable to you. Want to Upgrade?

To: unclewest who wrote (455)	11/23/1999 12:12:00 PM
From: Mr. Park	Read Replies (1) \| Respond to of 501

Quick, think of the highest gaining initial public offering in history! TheGlobe.Com (TGLO) should pop up in your brain faster than you can say C-M-G-I. The recent hot ipos of such issues as Akamai (AKAM) and Cobalt Networks (COBT) have brought on an avalanche of articles in publications wondering whether TheGlobe can ever have its 606% record broken. Its great to be known as the hottest ipo ever, but not if that is the only distinction of the company. Oh wait! It also has the distinction of being at its 52-week low and it given as the example of what could happen to your stock. Its no wonder investors are shying away. Management has done little to sooth the pains of those who own TheGlobe. Last May, TheGlobe.Com announced a stock split and subsequently the issue traded up like a good Internet stock split should. Then came the announcement of a secondary a week or two later. It sure looked like management wanted the issues to move up so they get a better pricing on the secondary. Hardly the actions of a management team that wants to gain credibility with the street as well as investors. So who is management? The key figure is Michael Egan, the 59-year-old chairman of the globe. Mr. Egan gained his fortune from building Alamo rent a car up from a 200-car operation into the third largest rental car company in the United States. He sold the company for a cool 587 million dollars to an associate of his good friend Wayne Huzienga. Egan doesn?t run the day-to-day operations. Rather, he advises TheGlobe on strategic business ideas such as mergers and acquisitions. The task of running this ship is none other than the famous or should I say infamous Todd Krizelman and Stephan Paternot. The dynamic duo started TheGlobe in 1995 while they attended Cornell University. They were able to garner $2 million in seed money and ran TheGlobe as both students and Internet entrepreneurs. Fast forward to 1997 and enter Egan. For $20 million dollars Egan bought 51% of TheGlobe.Com and that proved to be enough money for TheGlobe until its all too famous initial public offering. The twenty something superstars were instant millionaires and after their stellar IPO TheGlobe was the talk of the town. The story was beautiful. Two young ambitious college students try to change the world and on comes a multimillionaire who gives the two a shot at their dreams. It was the American dream but that dream is beginning to resemble a nightmare. A quick glance at the message boards on Raging Bull, Silicon Investor, or Yahoo and one can see the anger the investors feel towards the two young CEOs of TheGlobe. Investors are demanding that something is done but one thing is for sure, Egan and the two founders own a combined 46% of TheGlobe any deal has to satisfy their appetite. So what went wrong? The latest disappointment was a pre earnings announcement that revenues would come in a bit short. The estimate was $5.7 million but TheGlobe felt $4.7 to $4.9 was more realistic. The stock quickly fell more than 30% to a 52-week low. Presently, the stock is just a tad over the lows but still a light year away from its high of the high forties (post split adjusted). When TheGlobe finally reported its numbers revenues came in at the high range at $4.9 million. That is a 213% gain from the same period last year and an 18.6% gain from the previous quarter. Advertisers remained flat at around 166. Total membership increased 342,000 for the quarter bringing the total to 2.7 million members. Page impressions increased 20% to 349 million for the quarter. Earnings actually surprised beating estimates by .05 cents. Earnings were a loss of (.29) a share versus First Call estimates of (.35) a share. The revenue shortfall and earnings upside surprise is attributed to the delay in launching and promoting its new two new products, UPublish and GlobeClubs. What are these two new products and why are they so important? UPublish is an advanced home page and website building tool. The company hopes that the easier they can make the web page building process the more people will use TheGlobe. The GlobeClubs is the first product to come out of TheGlobe that actually makes an investor remember this is an Internet company. A company that is suppose to be cutting edge and dynamic. GlobeClubs are essentially network based message boards. Each posting by members of the board are emailed to the participants on the board. Talk about building a community. The possible licensing implications of this product are quite tremendous. The downside is that unlike message boards you can?t ignore an email but GlobeClubs is in its infant stages and surely applications such as ignoring certain members of the club so that certain postings are not received sounds easy enough. Can TheGlobe survive on it?s own? If you look at early competitors of TheGlobe you will see that GeoCities and Xoom.com (XMCM) certainly don?t think so. The most recent 10-Q showed that TheGlobe has $66 million in cash. $27 million will be spent on marketing and advertising campaigns starting in early November until fourth quarter of 2000. That leaves $39 million for the company before it needs a respirator. Pro forma net loss for this past quarter totaled $7.8 million. At the present pace TheGlobe will be in chapter 11 before they have a chance to spend the $27 million budgeted for advertising. Something MUST be done in terms of an alliance, merger, or buyout. Egan is very bright and regardless of what posters on the message boards think the CEOs are too. TheGlobe cannot survive very long independently. This brings us to who may be the best fit for TheGlobe. CMGI would be the best candidate. The aggressive marketing campaign in promoting Alta Vista in hopes of challenging Yahoo will need all the help it can get. Being able to provide personal web pages is a feature Alta Vista needs. The 2.7 million members don?t hurt either. Coupled with TheGlobe?s estimates that 40% of their users are international then one can begin to see a few possibilities. Alta Vista itself has a large international audience so how GlobeClubs on German, French, Spanish, and any other language David Wetherell wants to go GlobeClubs in. These GlobeClubs can then be used by Raging Bull to further enhance the financial community. Engage (ENGA) can profile the 2.7 million users to make sure they start spending some money because TheGlobe certainly hasn?t been able to do that. What is fair value for TheGlobe? Xoom.Com presently has a market cap of $1 billion dollars. They have 10.2 million users yet their revenues for last quarter totaled only $9 million. They are trading at a revenue multiple of 35Xs 1999 revenue estimates. TheGlobe is trading at roughly 18Xs 1999 revenue estimates. Any deal will most certainly be a stock deal. If TheGlobe were to get a 35Xs 1999 revenue multiple for a buyout that would bring the market capitalization to about 600 ? 620 million dollars. At 26.5 million shares outstanding that is approximately $20 - $23 a share. I don?t think so, but in stock deals using inflated Internet currency, no one knows. Let?s be conservative and use 25Xs 1999 revenue benchmark. That would bring the market capitalization to around $450 million or about $15 « a share. That sounds reasonable and that sounds likely. With the new accounting laws in regards to using pooling versus purchase method on mergers and acquisitions changing on January 1st now may be the time for TheGlobe to be taken.

To: unclewest who wrote (455)	11/24/1999 12:39:00 AM
From: Jon Khymn	Respond to of 501

Thanks for the tip, but I try to avoid playing in bio-hazard play ground. <g> TGLO & Gooey ---------- Tuesday November 23, 6:01 am Eastern Time Company Press Release SOURCE: theglobe.com theglobe.com and Hypernix Partner in Unique Marketing Campaign; Gooey Provides theglobe.com's Community Members with Real-Time Communication NEW YORK, Nov. 23 /PRNewswire/ -- theglobe.com, the trusted network of Internet communities (Nasdaq: TGLO - news), today announced that Hypernix Technologies, Ltd., the creators of the revolutionary roving Internet platform Gooey, will become a premier partner of theglobe.com. The agreement creates a unique partnership between the two companies which calls for Gooey to become the exclusive dynamic roving chat and multimedia application on theglobe.com's Web site building tool. Additionally, Hypernix will be launching an advertising campaign throughout theglobe.com. ``This partnership offers us an innovative and dynamic way to incorporate advertising into members' pages while providing users with a truly interactive experience,' said Will Margiloff, director, advertising sales, theglobe.com. ``Our ad campaigns are transcending traditional means of capturing members' attention by incorporating a real-time community dynamic along with distinct banner and button ads.' Gooey will provide theglobe.com community members with a downloadable icon, allowing members to build real-time communication into their home pages. Visitors simultaneously browsing the same member site will, for the first time, be able to communicate live with one another within the context of the site -- not locked away in a separate chat room. If members use theglobe.com to maintain a family Web site they can meet others in the family at their site and look at photos (for example) together and chat in real-time while looking at the pictures. Since Gooey is hosted on Hypernix's servers, member sites will not be burdened with hosting the product on their own sites. ``By bringing Gooey to theglobe's member pages, we capture a critical online audience in a unique marketing arrangement,' said Yaron Zilberman, Chief Financial Officer and Chief Marketing Officer of Hypernix. ``The use of Gooey will spread throughout theglobe.com community based on the uniqueness of our product and the viral effect of instant communication.' Hypernix will run original ads throughout theglobe.com's site prompting visitors to download Gooey. Many of the ads will be created exclusively for theglobe.com. In addition, Gooey will sponsor all chat areas on theglobe.com site for the duration of the campaign. About Gooey Gooey, launched by Hypernix in June 1999, is an integrated roving communications and media platform that gives users the power to communicate with others visiting the same sites (via chat and instant message) and receive rich-media broadband content (including streaming video of Bloomberg and Fashion TV and flash animation) with one dynamic product. By integrating Gooey with the surfing experience, Gooey is the first product to instantly create dynamic roving communities (DRC) by connecting like-minded people visiting the same Web pages. Launched with rave reviews, Gooey is available for free at gooey.com. About Hypernix Hypernix is a privately-held company founded in January 1999 with offices in New York City and Tel-Aviv. Globally recognized as a first mover, Hypernix is determined to continue the development of innovate products for the benefit of the online community. In July Hypernix entered in a marketing and equity partnership with CNET. About theglobe.com theglobe.com aggregates users around themes of interest by providing the best in community services. The Company offers a network of email clubs, globeclubs, as well as leading website building tools. theglobe.com is one of the largest independent community Internet services and has been a leader in the industry for over 4 years. theglobe.com network is comprised of theglobe.com community and the leading online game sites' HappyPuppy.com, GamesDomain.com, KidsDomain.com and ConsoleDomain.com.