CTCK Stock Communications Group Offers Investment Opinion on CraftClick.com
HOUSTON, Sep 6, 2000 (BUSINESS WIRE) -- Stock Communications Group --
713/297-8886 -- stockcomm.com -- actively seeks and reports on
overlooked and undervalued companies before the rest of the investment
communities find them.
There's nothing more we like to see than downward charts on companies with
strengthening fundamentals -- as long as we don't own them! CraftClick.com Inc.
(OTCBB:CTCK) appears to have run its course on the downward trend and, in our
opinion, is headed north once again. After coming off a recent high of $4 in
May, the chart seems to have found steady ground in the $0.75 range. Good news
for new investors!
OK -- we've all "been there and done that" with the Internet alphabet soup
companies (i.e. B-2-B, B-2-C, $20-2-$0.10). So what's the big deal with
CraftClick? Well for starters, to the best of our knowledge, they own more
affiliated craft sites than anyone else. To date, they have acquired 18
industry-related sites. This has created an EXTREME barrier of entry to other
crafting Internet wanna-bes. No question, the cost in doing so initially has
been dilutive to shareholders. However, the alternative is loading up the
balance sheet with debt and doing equity placements at ridiculously low prices.
In effect, this is the price one pays to get a company off and running in a
frenzied heartbeat. At the current price levels however, new investors have the
opportunity to enjoy a quick recovery in this company's previous cardiac kid
look-alike trading chart.
"Join our team" has been the company's motto. "We believe by controlling all the
significant entry points to arts and crafts on the Internet, we have created a
barrier to entry that will discourage many new entrants into this field and make
it almost impossible for our current competitors to catch up." -- Peter Yollin,
chairman and chief executive officer of CraftClick.com.
We agree -- instead of recreating the Internet wheel, CraftClick.com Inc. has
assembled an extraordinary conglomeration of suppliers, idea generators, and has
developed a marketplace for the hobby enthusiast via equity acquisitions.
According to Bill Gardner at Craftrends Magazine, "While some craft dot-com
companies are struggling to get off the ground, and craftshop.com has already
filed bankruptcy, at least two craft dot-coms appear to be rising to the top,
utilizing philosophies different from others in our industry. Offering
business-to-business opportunities, discount merchandise, and a network of niche
Internet sites, among other features, the Artisan Network and CraftClick.com are
both rapidly approaching profitability -- something many of their competitors
won't be seeing anytime soon."
The key words here are future profitability. According to management, sales
costs, as measured in terms of "buying" members per sites acquired, have
averaged $4. This may also be viewed as the cost of generating site traffic.
Eighteen in-house sites in May generated a minimum of eighty sales per day with
the average order ticket running at $48.00. The company's traffic costs then, on
average, were recorded at a 1:12 ratio. We call this the "Internet Heat Factor"
ratio. Other B-2-C companies call it the death spiral ratio, coming in at $100
per $50 of sales or 2:1. In other words, it really doesn't matter if they
generate $500,000 in sales per day if their heat factor ratio is greater than
one.
We expect CraftClick.com Inc. to turn a profit within the next 12 months, based
on additional financing and successful execution of its strategy. This is quite
a feat, given they have only been around since last December. Although the
company only generated $298,000 in revenues for the second quarter, we expect
the run rate to grow significantly in the third and fourth quarters. In
addition, $0.05 of the second quarter's loss of $0.09 was attributed to
professional fees (i.e. M&A, investor relations, etc.), and overall G&A expenses
should start to flatten out as a percent of sales. Sometimes big surprises come
in little packages. Buy on the rumor -- keep buying on the fundamentals!
Richard Reuter states, "Big surprises come in small packages. This is the
premiere arts and crafts Internet leader and is indeed a force to be reckoned
with since the company's inception last year."
This release is for informational purposes only. This information is free. It is
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Reform Act of 1995. Any such forward-looking statements may involve risk and
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Communications Group has received 25,000 shares of free-trading stock from CTCK
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time. Richard Reuter was paid a fee of $2,000 to consult in the research and
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This release is a vehicle for publishing information obtained from other
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upon a range of public news and information sources, as well as data and
opinions provided by CraftClick.com. Inc. ("CTCK" or "the Company"). These
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associated with investing and trading low-priced securities -- such as investing
information available from the Securities and Exchange Commission ("SEC") at
www.sec.gov and/or the National Association of Securities Dealers ("NASD") at
www.nasdr.com. CraftClick.com Inc. is a reporting company with the SEC. Readers
may review the Company's public filings at www.FreeEdgar.com and searching the
EDGAR database.
CONTACT: Stock Communications Group, Houston
Charles Bingham, 713/785-0577
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