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

To: JoF who wrote (68989)	1/29/2000 2:03:00 PM
From: westpacific	Read Replies (1) \| Respond to of 108040

LNTY L90 - net advertising company - research: IPO on Friday Based on figures, this looks like a valuation near $50 per share based on annual revs. of $11.5M with a rev. growth rate of 71%. IMO -always your on D&D! :> FCST: 30M (revs. - one year) Stock price $130 at buyout ADFC: 16M revs. Stock price $75 at buyout LNTY: 11.5M revs. $20 to $26 on first day of trading. (buyout prices were open market closing number without buyout premium factored in). FCST and ADFC were aquired this month by ENGA - Engage Technologies. Shares have gone from $50 to $150 in January on this news! Gives a little insite into the interest of net advertising companies. Article: Internet advertising is a hot and rapidly growing industry sector. Spending is expected to grow from $3.3 billion (?98) to $24.1 billion (?03). Internet direct marketing spending is a close parallel with spending expected to grow from $603 million (?98) to $5.3 billion (?03). While the old banner ads are languishing, sponsorships have taken over, representing 40% of online advertising in ?98 and expected to grow to 51% by ?01. With opportunities of this scale, companies in this industry are receiving close investor attention. L90 is a pure play advertising agency specializing in sponsorships, co-branding, content integration, and rich media. It also provides services to target and track performance. Clients include Alloy Online, Big Yellow, Liquid Audio, Ford, iVillage, Microsoft, Netscape, Proctor & Gamble, and Visa. So the firm has credibility within the industry. Started in 1/97, it emerged from start up in 2H?98. Recently revenues have been growing at a 71.7% rate and 1999 revenues are forecast in the $11.5 million range. The firm has positive gross margins of 28%, but since it is a service business they are less relevant. This sector is dominated by CMGI derivative companies, some of whom are engaged in consolidation. So aggressive competition is expected. Valuations have been very favorable. Doubleclick is trading in the upper quarter of it?s 52 week range while 24/7 is in the upper half. Recent IPO and CMGI affiliate Engage Technologies appears to be the leader. Offered on 7/21 it opened at $15 and closed at $41 for a 173.3% first day. It recently traded at $106.25, up 159% in the aftermarket. However, some of this aftermarket gain (approximately $10) is attributable to it?s bid to purchase Flycast Communications. Pre-offering demand has been reported to be strong and will probably accelerate into the offering. Expect a very warm first day (e.g., 100%) followed by near term aftermarket appreciation.