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Non-Tech : Wit Capital Group Inc - (Nasdaq - WITC) -- Ignore unavailable to you. Want to Upgrade?

To: Dan Hamilton who wrote (841)	4/13/2000 5:54:00 PM
From: the-half-wit	Respond to of 845

"devils advocate" in the following, i refer to two scenarios. one, in which the current correction bottoms with the nasdaq composite about 3500. the second, in which the nasdaq composite bottoms around 2500. [IPO slow down predicted; wouldn't that seriously impact wit? while Q1 may look good, Q2 and Q3 could be much less rosy.] 100% agreed. otoh, it is important to understand that the Q1 results are principally the result of a specific breakthrough that will now remain in place, and which will lead to revenues and profitability much more in line with the q1 level than the q4 level, even if the IPO market turns ugly. the breakthrough is the result of the investment banking capabilities wit gained when it merged with soundview, and the direct consequences of that change. in 99, wit (and EOffering) struggled (and failed) to convince issuers to give them adequate share allocations. that all changed in feb, post merger. wit will now demand mid-size co-manager allocations. despite, indeed because* of, the downturn, wit will get all the IPOs it needs, with the allocation size it wants, and the discount rate it wants. remember, it is perceived by issuers as one the best tech investment bankers in the business regardless of anything else, plus it has access to retail (individuals') capital. there's other aspects too, but the bottom line is that i very much doubt that wit will not be able to build on the q1 breakthrough. i expect wit to report a profit of $15-20m for q1, and then project a profit of $20-40m for the year. that calculates out to a forward pe of about 30:1 to 60:1. i expect them to meet those numbers if the market stays ugly. if the market improves, they will blow those numbers away. imo. ymmv. etc.