POPM found this on RB, sheesh I thoght I was on all the mailing lists by now:
By: drredfox $$$
Reply To: 1339 by Invest5905 $
Tuesday, 1 Aug 2000 at 5:31 PM EDT
Post # of 1351
Another report.
The Doppler Report Initiates Investment Coverage Of PopMail.com, Inc. (“POPM” on NASDAQ Small Cap)
With a consolidation of the “permission marketing” and affinity e-mail service industry now in progress, The Doppler
Report has initiated investment coverage of PopMail.com, Inc. (“POPM” on the NASDAQ Small Cap), a company that we
believe represents an attractive merger (or acquisition) target for a major ISP provider or Internet portal company.
Additionally, based on POPM’s growth in revenues and e-mail memberships, and its strong sports / entertainment client
base, we believe that PopMail.com is significantly undervalued compared to its competitors.
PopMail.com is a leading “permission marketing” and “affinity-based” e-mail marketing company, serving the needs of
individual businesses in the broadcast (television and radio), media, sports and entertainment industries. POPM consists
of two divisions: Internet e-mail services and a restaurant division. Management’s primary focus is to develop the Internet
e-mail division by exploring additional revenue sources and complimentary services through mergers, acquisitions and
joint ventures.
PopMail.com offers two major proprietary products:
eNewsNotifier (ENN) is a permission-based, e-mail marketing service that allows companies to collect preferences and
demographic information from their constituents, and then send out targeted, personalized and customized messages.
PopMail is an affinity e-mail service that allows companies to offer free, web-based, e-mail boxes on their home pages
(constituents sign up for a personal e-mail address that contains the company name). Client companies benefit from the
affinity with their customers because of higher traffic to their web sites (as members retrieve e-mail), and by sending
e-mail to friends, family and co-workers advertising the client company’s name (e.g., JoeSmith@LALakers.com)
PopMail.com is targeting four principal industries: broadcast, media, sports and entertainment. Consumers of products
and services in these industries typically have a strong affinity towards the companies that provide these items - for
example, a favorite major league sports team, TV or radio station, newspaper or magazine.
POPM’s customized e-mail services allows companies to cut through the clutter and inefficiencies of traditional marketing,
and begin promoting and branding more efficiently and effectively to their viewers, listeners, readers, fans and customers
on the topics and items that are of interest to them. The result is improved relationships with customers, lower marketing
costs and higher revenues.
Examples of PopMail.com’s e-mail services include:
TV stations can increase ratings by using ENN to notify members via e-mail about upcoming news stories of interest
scheduled for broadcast.
Radio stations can advertise their music programs, drive traffic to listen to their station by using targeted, private
messages and provide listeners with a free, web-based e-mail account
Sports teams can provide advanced information to members, sell tickets, merchandise and sponsor promotions using
ENN; they can also drive fan traffic to their favorite team’s web site by using PopMail’s free e-mail service.
HOW DOES PopMail.com GENERATE REVENUES ??
PopMail.com generates revenues in several ways.
First of all, every PopMail Network client (such as the LA Lakers) that signs up for the ENN service pays an annual
licensing fee plus a monthly hosting fee that scale upwards with the number of members.
Secondly, PopMail.com receives setup fees and web-hosting fees for its affinity e-mail service; these fees scale upward
with the number of members. POPM also collects fees on every e-mail sent by its clients.
All of the Internet services have exclusive multiple-year contractual agreements with each client.
Additional revenues are generated by the Restaurant Division.
During the first quarter of 2000, PopMail.com reported sales revenues of $2.44 million for the restaurant division and
about $380,000 for the e-mail services division; the combined net sales of $2.8 million represented a 17% increase over
POPM’s 4Q 1999 results.
We understand that POPM is estimating total e-mail sales for the quarter ending June 30th to be on the order of $800,000
to $1,000,000 (excluding revenues from the Fan Asylum subsidiary, which was acquired in mid-June, and is expected to
do about $2.5 million in revenues over the remainder of FY 2000).
The majority of PopMail.com’s future revenues are expected to come through e-commerce fees derived from charging
affiliates a transaction fee (% of each sale) for using the POPM’s e-commerce applications to sell merchandise, tickets,
and other goods through ENN and PopMail. Longer term, PopMail.com expects to reap potentially huge advertising fees
and revenues from selling ad space on PopMail e-mail pages.
PopMail.com HAS AN EXCELLENT CLIENT BASE
Currently, PopMail.com has a U.S. client base of more than 500 companies. In April, the Company announced that its
various services (e-mail list hosting, web mail hosting and content services) now reach more than three million users.
PopMail.com has over 80 television stations in almost every major market, including stations in all ten of the largest TV
markets. Clients include stations owned by Fox, ABC, CBS, NBC and WB. POPM also holds exclusive contracts with
hundreds of radio stations, representing 38 of the top 40 radio markets.
POPM’s eNewsNotifier (ENN) and affinity e-mail products are also used by over 90 professional sports teams (major
league hockey, baseball, and soccer), including every NBA team. Additionally, PopMail.com has been very successful in
selling its products and services to entertainment companies (Disney is a client), newspapers, magazines and radio
stations.
Through POPM’s permission e-mail service, ENN, Popmail.com clients are reporting substantial growth – an average of
75% compounded quarterly growth in membership (quarter over quarter growth, 4 quarters total).
PopMail.com’s PRODUCTS & SERVICES ARE CONTINUALLY BEING IMPROVED
In an effort designed to greatly enhance the marketing efforts of POPM’s predominantly English-speaking affiliates in the
United States PopMail.com has recently begun offering its e-mail products in Spanish and Portuguese language formats,
offering seamless functionality to Spanish and Portuguese-speaking affinity-based organizations both locally and abroad.
Combined with the Fan Asylum acquisition, these changes should allow POPM to greatly accelerate its planned
international expansion program.
More recently, PopMail.com introduced ENN 3.0, the latest version of the company’s popular permission marketing e-mail
service. Significant improvements in ENN 3.0 include: click-through tracking (allows clients to monitor how many
recipients click on links in an email message); HMTL templates (allows clients to send graphically-rich email messages
quickly and easily); and, banner ads (pre-formatted space for advertisements). These changes are designed to allow
anyone, regardless of HTML proficiency, to easily create fully-formatted HTML e-mails (incorporating text, images, tables
and links) using a Word ™ - like toolbar.
ACQUISITION OF FAN ASYLUM, INC. ADDS $5 MILLION IN REVENUES, INTERNATIONAL OFFICES & A STRONG
INTERNATIONAL PRESENCE TO PopMail.com
Last month, POPM closed on the acquisition of Fan Asylum, Inc., a company that manages and operates fan clubs and
official artist web sites for some of the entertainment industry’s hottest stars (using newsletters and email broadcasts),
including Aerosmith, Boyz II Men and Whitney Houston.
.
The company’s web site ( www.fanasylum.com ) boasts over 20 million hits per month, more than three million page views
per month and over 400,000 unique users per month, with average user sessions in excess of 10 minutes. Fan Asylum
has offices in three countries and generates revenues of about $5 million per year.
By acquiring Fan Asylum, PopMail.com has gained control over one of the largest music fan bases in the entertainment
industry, as well as immediately transforming POPM into a global e-enterprise. Operating as a wholly-owned subsidiary of
POPM, plans are for PopMail.com to use its proprietary technology and content development capabilities to provide
better, faster and more cost-effective service to Fan Asylum’s existing affinity-base.
PopMail’s DEAL w/TICKETMASTER COULD BE HUGE…
On May 10th, PopMail.com entered into an agreement to provide permission marketing e-mail services for
TicketMaster.com, the world’s top online ticketing site.
As part of the agreement, TicketMaster.com will use PopMail.com’s e-mail marketing tool, ENN, to target ticket buyers
(who have elected to receive e-mails) with customized offers and specialized content. POPM’s e-mail services will allow
TicketMaster to reach individual consumers with permission e-mail that will ultimately provide an opportunity to drive ticket
sales through a newly-created profiled email ticket buyer database.
In addition, the companies are jointly exploring additional products and services to spur incremental ticket sales for sports
and entertainment entities.
A CONSOLIDATION OF THE E-MAIL INDUSTRY IS JUST NOW GETTING UNDERWAY…
With investors and the markets coming to realize that revenues and profits really do matter, there is a trend towards
consolidation of the “permission marketing” and affinity e-mail service industry, with larger companies acquiring smaller,
successful firms.
In March, CMGI, Inc. acquires YesMail.com, a company that was supplying e-mail services to about 100 big corporate
clients, including AT&T and eToys. More recently, 24/7 acquired Exactis.com, a company that was providing e-mail
marketing and communications outsourcing services (primarily e-mail newsletters and order / trade confirmation delivery
service) and that sends about 10 million e-mails per day on behalf of such clients as MSNBC and Sony Music.
We believe that in light of PopMail.com’s rapid growth and strong client bases in the entertainment, media / broadcasting
and sports industries, that POPM is a likely takeover target. Who might be interested in buying POPM? Possibly an ISP
provider or Internet portal (e.g., AOL or Yahoo!), or even one of the big multi-media companies like Time-Warner.
SO, WHAT’S A REASONABLE VALUATION FOR PopMail.com ??
In their April 2000 Buy Recommendation on PopMail.com, Schneider Securities developed two different valuation
methodologies for POPM.
The first method assumes that each member (e-mail address) has the potential to generate X dollars in revenue each
year. Schnieder Securities used an average multiple of $200 per member for POPM’s peer group of comparable
companies.
Therefore, valuing POPM based on its current membership base (3,000,000 e-mail addresses) and a $200 multiple
would suggest that POPM would be fairly-valued at a market capitalization of $600 million or about $8 per share on a
fully-diluted basis.
Schneider Securities’ second valuation method was to look at the potential revenue that could be generated by each
member on an annual basis (about $3.75 / member among comparable peer group companies), and then applying an
average multiple (23x) on these projected gross revenues.
Using the industry average figure for potential revenues per members would suggest a price of about $3.40 per share on
a fully-diluted basis. However, PopMail.com members are generating, on average, about $5 in “annualized revenue
opportunities”, which would imply a valuation of about $4.60 per share on a fully-diluted basis.
POPM SHARE STRUCTURE & RECENT TRADING RANGE
Total Shares Outstanding: 36,354,928 common shares
275,000 shares Series E Convertible Preferred
287,408 shares Series F Convertible Preferred
600,000 shares Series G 10% Convertible Preferred
Fully-Diluted: 75,243,994
Public Float: Est’d @ 17 million
52-week Trading Range: $0.66 by $7.12
Last Trade (July 19, 2000): $0.91
Above and beyond the approximately 36.4 million shares outstanding, PopMail.com has reserved an additional
38,889,066 shares for issuance pursuant to stock option plans, outstanding preferred stock and common share purchase
warrants. Investors should keep in mind that the exercise of all outstanding warrants and options would add about $45
million to PopMail.com’s treasury.
Listed on the NASDAQ Small Cap market under the symbol “POPM”, PopMail.com, Inc. is a fully-reporting company. All
of POPM’s filings are available for viewing at www.FreeEdgar.com. Arthur Andersen serves as the company’s
independent accountant.
PopMail.com is beginning to attract the attention of analysts. POPM was recently featured by R.J. Steichen & Co., Inc.
(Dennis Nielsen @ 612-341-6234) and ResearchStock.com (Rick Wayman @ 614-233-4410). In April, Schneider
Securities, Inc. (Stephen Stark @ 716-454-6440) awarded POPM a “Speculative Buy” recommendation with an 18-month
price target of $22 to $25.
PopMail.com is in strong financial condition. The company completed two private placements during 1Q 2000, raising
$8.35 million. The company has also recently entered into two separate Investment Banking Agreements. Both Schneider
Securities, Inc. and Sands Brothers & Co. Ltd. have been retained to advise POPM on merger and acquisition strategies,
and assist with capital raising activities and corporate development opportunities.
POPM’s Café Odyssey restaurant division develops, owns and operates two upscale, casual theme restaurants in the
United States. More information on the restaurant division can be found at the company’s web site:
www.CafeOdyssey.com. PopMail.com has no current plans to expand its restaurant division, although it may do so
indirectly through licensing or other arrangements.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Michael Lafferman @ Metropolitan Capital Partners, Inc.
Phone: (310 358-9977
e-mail: MikeL@metcapinc.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 Publisher has independently prepared this report, drawing upon a range of public news and information sources, as
well as data and opinions provided by PopMail.com, Inc. (“POPM 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 (24 July
2000) 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 readers of this report
that it has not received a fee from PopMail.com, Inc. for its efforts in researching, writing and presenting the information
contained herein.
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" ELIGIBILITY 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 readers to review the investing information available from 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. POPM is a
fully-reporting company with the SEC. The company’s recent SEC Filings may be accessed through
freeedgar.com and searching the EDGAR database.
© 2000 The Doppler Report |
