the management is new, I think, and the focus is now on travel and mortgages, other e-businesses jettisoned...the name your own price on airline tickets is very popular. i have used it a couple times..at 6 down from 124 and staff cut by 60 per cent, hey, what the hey?
HERE IS AN OLD ARTICLE:
Feb. 23, 2001
CHICAGO (CBS.MW) -- Shares of Priceline.com Inc. took flight Friday - up 40 percent - after an analyst urged investors to aggressively purchase the stocks.
In recent trading, Priceline (PCLN: news, msgs, alerts) shares were changing hands at $2.72, up 69 cents in above-average volume.
The surge came with thanks to Legg Mason Wood Walker Inc. analyst Thomas Underwood, who initiated coverage of the company with a "strong buy" recommendation and a price target of $6.
In a report to clients, Underwood said the worst is behind Priceline, whose stock has plunged from a high of $104.25 to a low of $1.06.
He should know. He worked full time at the company until June, developing its hotel operations. "I understand the model pretty well," he said, "and its seasonality and profit model.
"I didn't pick up coverage of it until now because there always were issues concerning affiliated companies and other possible charges," he said. "They're all gone now."
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Underwood agreed with senior executives, who said on a conference call last week that the company is expected to turn a profit by June.
"The business is there and they're focused on the profitable portions of the business," he said in an interview. He expects Priceline to generate $5 million this year in earnings before interest, taxes, depreciation and amoritization and then jump to more than $50 million next year. This year, he projects sales to reach about $1.1 billion, about 5 percent above last year's.
On a per-share basis this year, Underwood projects Priceline to lose 4 cents in the first quarter, and then earn 2 cents in the second quarter, 3 cents in the third and 4 cents in the fourth.
"I don't expect much growth this year," he said. "Not because the business is flatlining, but because it took such a hit in the second half of last year, and it was so strong in the first half that the comparisons make it look flat."
Indeed, Priceline shocked investors when it reported fourth-quarter losses of 15 cents a share, more than double the losses expected.
Underwood said the ongoing cost structure - trimmed considerably in the fourth quarter - allows Priceline to continue to generate more gross profits than its closest competitors, Expedia.com and Travelocity.com
"Despite the company's checkered past regarding hitting earnings estimates and expansion plans, we are confident in" the near-term outlook.
There was a caveat, of course.
"We believe Priceline to be the most speculative investment among the Internet stocks we cover, and we only recommend purchase by investors with extremely high risk tolerance," Underwood said in the note.
Underwood said he still holds about 2,500 options at $3.20 a share. Even if the stock were to double in price because of his recommendation, "my total benefit is less than $2,000," he said. "I better not be depending on that as a paycheck."
The day he left the concern in March, shares were trading at $95 each. He stayed part-time with Priceline through December to keep his options vested, which, he was quick to add, "turned out to be totally worthless." |
