Follow-up: TheTruthseeker.com exposes what Stamps.com is not communicating to the investing public.
TheTruthseeker.com first reported on Stamps.com (NASDQ: STMP) in this orginal detailed analysis report
thetruthseeker.com To that report we add the following analysis.
In what can be best described as proactive denial and avoidance on the part of the company (NASDAQ:STMP), Stamps.com has decided to do the absolute minimum to notify public investors of the mass Exodus of the Stamps.com's original founding “brain-trust”.
The Exodus
On December 14th 1999, The three co-founders of Stamps.comTM -- Jim McDermott, Jeff Green and Ari Engelberg -- will leave the company after apparently all of them turned in a TWO-WEEK NOTICE. They will no longer be with Stamps.com in the new Millenium. At the end of 1999 the three as a team will leave Stamps.com
What Stamps.com did to communicate:
Stamps.com did not send this news out via the wires, it was contained only on its own site, and not disseminated to the investing public via a press release to the wire services. That is why this information is not seen on the news services attached to the stock symbol, such as Yahoo Finance. We do not understand why this was done, but is seems that is type of material event that needs to be made available to the public. TheTruthseeker has check more than 6 different news sources linked to the STMP stock and was not able to find the news within the Press.
As far as we know the information is only contained within the Stamps.com site itself.
stamps.com
Why is that significant:
Stamps.com recently did a secondary public stock offering. It was effective on December 7th and Stamps put out the following news release concerning its completion on December 13th, 1999. The put out a PR to say they have completed the secondary but do nothing concerning the “The Exodus”.
SANTA MONICA, Calif.--(BUSINESS WIRE)--Dec. 13, 1999-- Stamps.com(TM) (Nasdaq:STMP - news) today announced that its follow-on public offering, which closed on December 10, 1999, resulted in net proceeds of $309.1 million through the sale of five million shares of Stamps.com common stock.
biz.yahoo.com
What else happened on December13th???
Two broker new brokers involved with the secondary offering, which was, declared effective on December 7, 1999 iniated coverage of STMP.
stamps.com
“The offering was managed by Goldman, Sachs & Co., Salomon Smith Barney Inc., BancBoston Robertson Stephens Inc., Thomas Weisel Partners LLC and Volpe Brown Whelan & Company, LLC.”
Stamps.com (a) STMP Goldman Sachs » Market Outperform
Stamps.com (a) STMP Salomon Smth Brny » Outperform
biz.yahoo.com
biz.yahoo.com
Neither Goldman Sachs nor Salomon Smith Barney made as statement concerning the loss of the founders. Why would this critical information, not have been known by the managing firms of the secondary? Especially considering the recommendations came out only the day before the official announcement of the Exodus? TheTruthseeker does not know but it seems reasonable to assume that the analyst would have been updated to this critical information before they initiated coverage. That seems reasonable, but if not, why not? New investors were given buy recommendations but no information concerning the “founders” leaving.
What else is happening in December?
On 12/22/99 the lockup period associated with IPO 180 days prior are removed. It is also the last month of the quarter in which Stamps is expected to have its first sales ever. To date Stamps.com or the recently acquired iSHIP.com have no Sales whatsoever. So for the first time in January they will show what they can actually produce in terms of sales. Sales are projected estimated to be less than 1 million for a company with a current market capitalization of near 2.5 Billion dollars. (That is before the secondary offering) Stamps has been aggressively spending money on an advertising campaign. In the opinion of TheTruthseeker.com these ad are more suited to prospective investors rather than prospective customers.
What do we know about these Founders?
From the SEC filings------ “In January 1998, we also sold 423,993 shares of common stock to each of our co-founders, James McDermott, Ari Engelberg and Jeffrey Green, for a total purchase price of $16,960, which amount includes $9,000 in notes payable to Stamps.com”
Thus as these insiders leave the company they will be free to sell there shares. That $16,960 investment will net each of the three founders $27,559,545 and a market price of $65 dollars.
What does the average investor need to be concerned about?
Well the brain trust of company founders is bailing out and leaving as and intact working team at the most critical point in this startups life cycle. Much of the value of an Internet company is based of the promise of innovation, and what the future may hold. What the players are doing are leaving the shell of Stamps.com behind and will be starting a new company. Stamps.com has yet to see any reported sales, that comes in January. The IPO is only 6 months old. This company is not on sure footing at all. In fact it is under serious threat of lawsuits on patents from rival Pitney Bowes.
Our View
It our view that these founders are taking the money and leaving prematurely, without completing the implied promise of shaping the future of the Internet within their own company. Without further innovation Stamps.com will simply be a niche money-losing player in a business model that relies on marking up what is essential a commodity product. Without further innovation, the kind the founder will do for another firm, Stamps future is not bright. As it stands to Stamps.com represents the Internet Bubble at its weakest spot. This is not how the startups of Silicon Valley sustained themselves, the founders of Sun, Apple, Intel, and Yahoo all remain.
TheTruthseeker.com recommends that current investors of Stamps.com take the lead of the founders and put their resources into a more profitable and safer investment.
Why did Stamps.com not send out this important news about its founders to the wires?
The question remains, and the TheTruthseeker.com continues to watch.
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