The Doppler Report
Initiates Investment Coverage With A Buy Recommendation for:
WSi Interactive Corporation
("WIZ" on the Canadian Venture Exchange & "WIZZF" on OTC - BB)
Toll-Free: (888) 388 - 4636
Web-site: ws-i.com
An established, fully integrated, profitable direct marketing firm that has evolved into a leading incubator and developer of profitable on-line businesses
WSi Interactive expects to introduce as many as 30 new dot.com companies over the next two years - WSi will maintain significant equity stakes and management contracts in each of these new ventures
The company enjoys established revenue from existing clients and projects solid revenue growth over the next two years, with huge potential blue sky capital gains based on WSi Interactive's equity stakes in each of these new dot.com businesses
A RAPIDLY-GROWING INTERNET BUSINESS INCUBATION & MANAGEMENT FIRM
WSi Interactive Corp. ("WIZ" on CDNX and "WIZZF" on OTB-BB) is an Internet business development and direct marketing firm that builds, manages and markets a wide range of exciting new on-line companies. WIZ draws upon its 10+ years of direct marketing experience and information databases to cost-effectively attract qualified buyers to its proprietary and client websites, and then builds long-term relationships with these well-qualified customers on-line.
Bottom-line, WSi Interactive has a unique, integrated model for building, managing and marketing Internet businesses. When a WSi-developed "dot.com" company goes on line or does an IPO, the business ideas have been proven to be viable, the web sites are fully-operational, and there is a solid revenue stream from day one.
The marketing model for WIZ is CMG Information Services (CMGI - NASDAQ), which evolved from a direct marketing agency in 1990 to one of the largest networks of Internet companies in the world. Like CMGI, WSi Interactive plans to establish itself as a recognized leader in the Internet economy, by creating a one-stop shop for e-commerce and e-advertising, plus financial information and entertainment.
What WSi does is actually quite simple: using the principles of direct marketing, they understand who their customers are and what they want, and then they deliver on all of the customer's specific online needs. WSi does this by building sites focused on a specified target market or niche, drives qualified traffic to these sites, analyzes the traffic using their unique pinpoint system, and then modifies that site to better suit the specific target market's needs on an ongoing basis.
In other words, not only does WSi provide a business with infrastructure to get online, but they also provide these businesses with qualified traffic and turn that traffic into revenue. With their unique infrastructure, WSi Interactive is able to quickly determine the proof of concept for the business and deliver it on line.
WSi Interactive owns three complementary companies: Western Shores Direct Marketing Group Inc. (http://www.WesternShores.com/ ), a sophisticated database and direct marketing firm; MediaNet Solutions Inc. (http://www.MediaNetSolutions.com/ ), a high end website developer and provider of state of the art web hosting services; and, TargetPack Enterprises Corp. ( targetpacks.com ), an e-mail broadcaster and developer of e-mail opt in lists.
WSi has developed four proprietary websites to date: StockSecrets.com, HealthCreator.com, YourWineStore.com, and TargetPacks.com. The company is also working on several other sites in partnership with other companies. These include Flash Candy, an on-line greetings card site, restauranthelp.com, and Bodysentials.com
WSi Interactive's discussion threads on Silicon Investor and Raging Bull can be accessed at:
Subject 29873 and ragingbull.com, respectively.
WSi EXPECTS TO LAUNCH UP TO 30 NEW "DOT.COM" BUSINESSES IN THE NEXT TWO YEARS
The mandate of WSi is to design, build and manage Internet businesses, both internally and for others. It is doing so by combining the marketing skills of Western Shores with the comprehensive Internet infrastructure and web expertise of MediaNet and TargetPacks.
WSi Interactive has identified some 30 additional website concepts which will be researched and developed over the next two years in four business areas: financial, e-commerce / e-retailing, entertainment, and e-advertising. Each of these ventures will be future clients and / or directly /indirectly owned by WSi. Every new Internet business brought to market will have projected revenues of $1.2 + million in their first year of operations.
As the website concepts move from concept to design through proof of concept and roll out, successful websites are expected to be spun off into public vehicles (as per the CMG Information and IdeaLab concepts). WSi will in most cases retain site management and related fees as well as realizing capital gains.
In the last few months, WSi has rolled out four proprietary web sites, one of which is profitable (StockSecrets.com) and two others that are generating strong revenues (YourWineStore.com and HealthCreator.com). Other businesses are currently in the development stage.
We believe that new businesses represent tremendous "blue sky" potential for WSi, as well as greatly expanding the cash flow generated by the group. Recently, Quote.com, a financial web property offering real-time quotes and other information (not unlike WSi Interactive's StockSecrets.com, phase II, to be launched early in 2000), was sold to Lycos for approximately $78 million. WSi's TargetPacks.com compares well to Yesmail.com which was recently acquired by CMGI and now has a market cap of $387 million.
MULTIPLE REVENUE STREAMS & STRONG GROWTH OVER THE NEXT 18 MONTHS
The WSi Interactive group of companies currently generates about C$3 million in revenues and is profitable; revenues increased 33% in the fiscal year ending June 30, 1999.
Increasing revenue from StockSecrets.com and the revenues from both the core businesses as well as the newly-launched websites suggest that WSi Interactive is on track towards its target FY 2000 revenues of about C$6 million, of which approximately 50% will be derived from Internet-related projects.
The basic strategy of WSi is to aggressively build a profitable revenue stream. Over the short term, WSi intends to increase revenues from the $2-$3 million level to $6 million, accomplished through a combination of traditional activities of its subsidiaries as well as new/enhanced online activities and properties. Longer term, we see much of the blue sky emanating from the development of proprietary websites.
MIGHT WSi INTERACTIVE BE THE NEXT CMG INFORMATION SERVICES (CMGI - NASDAQ) ?
The WSi Interactive business model and core competencies are quite similar to that of CMG Information Services Inc. ("CMGI" on NASDAQ), which evolved from a direct marketing agency in 1990 to one of the largest developer and operator of Internet and direct marketing companies in the world.
In terms of corporate performance, CMGI has approximately 245.9 million shares outstanding, trades at about US$125 per share, has grown its revenues from US$23 million in 1995 to US$91 million in 1998, while reporting an increase in earnings from 6½ to 25½ per share over the same period.
WSi Interactive, on the other hand, has 31.2 million shares outstanding and is projecting revenues of about C$12 million over the next 18 months.
THREE PROFITABLE AND COMPLEMENTARY DIVISIONS PROVIDE THE BASIS FOR GROWTH
WSi Interactive has brought together three separate, but complementary companies and organized them into a solid marketing and technology infrastructure that provides the foundation upon which to conceive, build and manage successful Internet businesses. Together, these subsidiaries provide a critical mass of skill sets, personnel, database content and design, and Internet-related infrastructure, as well as four fully-operational and established Internet businesses. WSi has existing client bases and revenue streams at each of its subsidiaries to support its rapid growth plans over the next 18 months.
WesternShores Direct Marketing Group. Established in 1990, Western Shores has become a leading direct mail / database marketing agency for clients in Canada and the United States. In the fiscal year ending June 30th, revenues were just under C$3 million.
What Western Shores does best is targeted communications. They can take a client's existing database (i.e. a retail or mail order customer base) and build a highly accurate profile of households in order to hone a message, target the audience more precisely, and create effective customer loyalty programs. The benefits to clients are cutting costs associated with ineffective, improperly targeted direct mailing lists and achieving higher response and success ratios from advertising programs. Clients have included public and private organizations, retail and catalogue firms, financial institutions, insurance companies, and fundraising organizations.
A priority for Western Shores is to overlay and supplement its traditional mail-related databases with Internet-related information and build enhanced customer profiles with which to create industry specific customer programs.
TargetPacks.com. This division of WSi Interactive specializes in "Opt-In E-mail List Management", which are compiled from individuals who have requested information about specific products and services. TargetPacks then uses the information to produce highly-profitable, large volume e-mail broadcasts, newsletters, and other web-based promotions to specific audiences which generate cyber traffic, produce leads, build market awareness, and produce e-business opportunities for clients in a wide range of industries.
Developed just two years ago, WSi projects revenues of $1.3 million for TargetsPacks.com in the current fiscal year.
MediaNetSolutions.com. The MediaNet division of WSi provides high-end web-site development and advanced web hosting services, with a reputation for building sites that build traffic and return on investment, rather than on simply creating graphically pleasing web pages. To date, MediaNet has designed and built over 70 websites. Projected service revenues from this business segment is $1.35 million for the current year.
MediaNet is aggressively moving into "convergence" Internet applications, specifically Internet broadcasting and telephony. MediaNet has recently signed agreements with the Los Angeles Film School and HollywoodBroadcasting.com, Inc. to provide turnkey Internet solutions for website development, network set-up, and technology to deliver live, interactive video broadcasts on-line.
REASONS WHY YOU SHOULD CONSIDER ADDING WSi INTERACTIVE TO YOUR PORTFOLIO
We view WSi Interactive as an excellent investment opportunity at current prices, underpinned by strong forecasted revenue growth, while providing exposure to a wide array of new "dot.com" business ventures, all with the potential for significant capital appreciation over the next twelve to eighteen months.
WSi's management team, with a solid record of building and operating profitable businesses, is taking the right steps to position the firm for future growth. In November, WSi Interactive announced that Mike Donald, the co-founder of HomeGrocer.com, a neighborhood grocery shopping and delivery service that recently secured a C$100 million financing, had recently joined WSi's Board of Directors. We view WSi's ability to attract people of this caliber as a strong vote of confidence in their business plan, and recognition of the firm's growth potential.
In terms of valuations, many Internet plays trade at multiples of 10x (or more) annual revenues. As such, WSi Interactive could be considered to be undervalued based on the current revenue base, and looking towards the 2000 - 2001 fiscal year, the markets appear to be significantly undervaluing WSi.
We do not believe that the markets are awarding WSi Interactive any premiums for the many Internet business concepts now in development. With 30 projects in the pipeline, the odds are that there might be at least one big winner or "category killer" business, from which WSI might realize some very significant capital gains.
WSi INTERACTIVE SHARE STRUCTURE & RECENT TRADING RANGE
Total Shares Outstanding: 31.2 million
Fully-Diluted: 51.4 million
Public Float: Est'd @ 10 million shares
WIZZF 52 week range: US$0.03 (low) by US$0.77 (high)
Current Bid & Ask: US$0.54 by US$0.60
Last Trade (January 12, 2000): US$0.54
WIZ 52 week Range: C$0.05 (low) by C$1.09 (high)
Current Bid & Ask: C$0.75 by C$0.77
Last Trade (:January 12, 2000 C$0.75
WSi Interactive is a fully-reporting company - Bedford Curry is the company's auditor.
During the quarter ending September 30, 1999, WSi's revenues of C$814,893 exceeded the first quarter target of C$750,000; while the company reported a small net loss, the reporting period was one where WSi made significant investments in technology and human resources, as staffing grew from 20 to 42 full-time employees and assets increased to C$2.3 million. The company's September 1999 financials can be viewed at ( ws-i.com ).
For more information, please contact:
WSi Interactive Corporation
Richard Cushing or Phillip Cook
(888) 388 4636
e-mail: info@ws-i.com
DISCLAIMER - PLEASE READ
The Doppler Report (the "Publisher") is not a Registered Investment Advisor or a Broker / Dealer. Readers are advised that this report is issued solely for information purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy.
Reproduction of this report, in whole or in part, by any means, electronic or otherwise, including via the Internet, without prior written permission, is strictly prohibited.
The Doppler Report has independently prepared this report, drawing upon a range of public news and information sources, as well as data and opinions provided by WSi Interactive Corporation ("WIZ" or the "Company"). Prior to publication of this report, the Company reviewed and approved the contents hereof. The Publisher has not independently verified the Company's representations. Any opinions expressed in this report are statements of judgment as of the date of publication (7 December 1999) and are subject to change without further notice, and may not necessarily be reprinted in future publications or elsewhere. Neither the Publisher nor its owners, employees or consultants accept any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
The information contained herein is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. The opinions and analysis included herein are based on sources believed by the Publisher to be reliable and in good faith but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. The foregoing discussion also contains forward-looking statements that are based on current expectations and differences can be expected. The information and opinions contained herein is not intended to be a complete discussion of information regarding some of the current and/or intended business activities of the Company, and all information contained in this report should be independently verified with the Company. Readers are urged to consult with independent financial advisors with respect to an investment in the shares mentioned herein. Investors should review a complete information package on the Company which should include, but not be limited to, the Company's annual report, quarterly report, press releases, as well as all regulatory filings.
In order to be in full compliance with the Securities Act of 1933, Section 17(b), the Publisher advises its readers that it has received a fee of 5,000 common shares of WSi Interactive from Instant Digital Printing as compensation for its efforts in researching, writing and presenting the information contained herein. The Publisher, its owners, employees and consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after Publisher, its owners, employees and consultants have made positive comments regarding the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. INVESTORS MUST ALSO INDEPENDENTLY VERIFY THE "BLUE SKY" ELEGIBILITY OF THE SECURITY MENTIONED IN THIS REPORT BEFORE MAKING ANY INVESTMENT DECISIONS. TIMING OF, AND ANY BUYING OR SELLING DECISIONS, ARE THE SOLE RESPONSIBILITY OF THE READER.
The Publisher encourages U.S. readers to review the investing information available with the Securities and Exchange Commission ("SEC") at sec.gov and/or the National Association of Securities Dealers ("NASD") at nasdr.com The NASD has published information on how to invest carefully at its website.
WSi Interactive is a fully-reporting company with the SEC; readers can review WSi's public filings (including financial information at the SEC's EDGAR page freeedgar.com. Readers may also review a complete listing of WSi's public filing's with the Canadian Venture Exchange (including news releases and financial statements) at the SEDAR web site, located at sedar.com.
SAFE HARBOR DISCLAIMER
Certain statements contained herein constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements include, without limitation, statements regarding business and financing plans, business trends and future operating revenues and expenses. Although the Company believes that the statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically indicated by the words: believe, expect, anticipate, intend, estimate and similar expressions, or, which by their nature, refer to future events. The Publisher cautions investors that any forward-looking statements made by WSi Interactive Corporation are not guarantees of future performance, and that the actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, the ability to continue its substantial project growth, or to be able to fully-implement its business strategies. |
