John Lacelle: Thanks for the suggestion that I "take a close look at HOMS for the next six months."
I've been taking a pretty hard look at this company and what it does for much longer than you have. I guess you haven't read my past postings on SI on this topic....and I really wouldn't expect you to.
However, *you* should not assume you are the only one between the two of us who knows anything.
For example, the information below is the type of thing that tells me that HOMS isn't going BK anytime soon. It just doesn't look like that scenario is in the cards, and I wouldn't place a strong bet against HOMS right now. Good luck to you. The following article is from Realtor Magazine.
_______________
Real Estate Meets Wall Street
Homestore.com Stock in the Headlines
Real estate portal reports its net losses are down.
BY TOM DOOLEY
HomeStore.com has been consistently making headlines in the real estate and financial industry during the past couple of weeks. First, the real estate Web portal company endorsed, and partially owned, by the NATIONAL ASSOCIATION OF REALTORS®, was successful in selling 8.3 million shares of its stock in a secondary offering. Priced at $110 per share, the offering raised a total of approximately $913 million, of which about $425 million went to the company and $446 million went to a small group of in-company selling shareholders. The remainder went to a group of underwriters led by Morgan Stanley Dean Witter.
Could Homestore be closer to breaking even? The company reported a substantial decline in net loss for the fourth quarter and a considerable increase in pro forma, or estimated, revenues for the quarter. Revenues totaled $28.1 million, a 233 percent increase over pro forma revenues of $8.4 million for the fourth quarter of 1998, and a 36 percent increase over pro forma revenues of $20.7 million for the third quarter of 1999.
The pro forma net loss for the fourth quarter of 1999 was $16.2 million, or $0.23 per share. That compares to a pro forma net loss for the fourth quarter of 1998 of $15.5 million, or $0.32 per share. The company's revenues for the fourth quarter of 1999 were $27.4 million, compared to $18.6 million, for the third quarter of 1999. (The net losses reflect the fact that a different number of shares was outstanding in the fourth-quarter 1999 reporting period than in 1998.)
Pro forma revenues for 1999 were $73.4 million, a 217 percent increase over pro forma revenues of $23.1 million for 1998. The company's pro forma net loss for 1999 was $71.1 million, or $1.14 per share, compared with a pro forma net loss of $44.9 million or $1.04 per share in 1998.
Pro forma net losses exclude such financials as amortization of intangible assets and a litigation settlement. Homestore.com officials noted that revenue growth in the fourth quarter was driven largely by increased revenue from subscriptions for home pages and other marketing services as well as an increase in advertising revenue.
This favorable financial news led two major brokerage houses to strongly recommend Homestore.com stock. In fact, Donaldson, Luftkin & Jenrette reassigned some analysts to cover the company. The brokerage projects a target price of $160 and has reduced its estimate of a 2000 fiscal year loss to $.38 per share from $0.54. Meanwhile, Robertson Stephens said it was reiterating its buy rating and "raising our estimates substantially in the wake of the company's strong fourth quarter results, which beat our expectations."
On top of all this, HomeStore.com and the National Association of Home Builders extended their current alliance to a 20-year period. The agreement solidifies the relationship between the organizations, enabling visitors to HomeStore.com to explore more than 120,000 models, new homes, and built-to-suit plans from more than 15,000 builders.
On the heels of this announcement, Homestore.com said that it'll host the Web site for the Manufactured Housing Institute, the national nonprofit trade association for manufactured housing providers. HomeStore will also become MHI's endorsed provider of e-products such as Web sites, home pages, and e-mail services.
But HomeStore wasn't the only real estate-related Web entity to make news recently. MSN HomeAdvisor, Microsoft's real estate portal, entered an exclusive agreement with MoveCentral.com, a Boston-based provider of on- and offline moving-related services. MoveCentral is geared to more than 17 million Americans who move and spend more than $102 billion annually.
Meanwhile, Cendant Corp., parent of the Century 21, Coldwell Banker, and ERA franchises, launched Move.com, its new Web portal for all things related to residential real estate. Move.com replaces the company's CompleteHome.com site, and provides mortgage information, home and rental listings, assistance with utility and other service connections, and comprehensive moving and home-related content to customers who're transitioning to new homes or communities. It integrates content and commerce with business partners, including All State Insurance, Furniture.com, CarsDirect.com, Ryder Truck Rental, ImproveNet, and Carefinder.net, and has distribution agreements with a number of Internet market leaders, including Yahoo, America Online, Lycos, Excite, Ask Jeeves.
Cendant also announced that it would combine its online and offline businesses into a new entity, Cendant Internet Group. Company officials appointed Samuel L. Katz, formerly Cendant's senior executive vice president of strategic development, as the group's CEO. He'll report directly to Cendant Corp. chairman and CEO Henry R. Silverman. Move.com will likely file an IPO soon.
Cendant officials said that over the next several months, the company will develop a comprehensive Web plan that delivers several new business applications and e-enables the Cendant organization. During this time, the company also expects to enter into related alliances and investments to further enhance its digital strategy. CIG will work closely with a new alliance partner, Liberty Media, and Cendant's management to realize its convergence plan.
Liberty Media will invest $400 million in cash to purchase 18 million shares of Cendant common stock and two-year warrants—or rights—to buy approximately 29 million shares of Cendant common stock at an exercise price of $23 per share. The company will also pursue opportunities within the cable industry to leverage Cendant's direct marketing resources and capabilities.
Liberty Media's principal assets--video programming, communications, technology and Internet businesses--include interests in StarzEncore Media Group, Discovery Communications, Inc., Time Warner, Inc., and QVC, Inc. |
