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Technology Stocks : Audible Inc-(Nadaq-ADBL) -- Ignore unavailable to you. Want to Upgrade?

To: William T. Katz who wrote (157)	10/31/2003 4:55:35 PM
From: Roger W. Bowen	Read Replies (1) \| Respond to of 165

Anyone following this board anymore? There's sure been a surge in the stock price recently. It's my opinion that Apple's iTMS and some of their competition have raised the prospects for this company. Thoughts anyone? Roger

To: William T. Katz who wrote (157)	6/3/2004 12:03:02 PM
From: RRICH4	Read Replies (1) \| Respond to of 165

ADBL in USA Today usatoday.com More on ADBL Poised For Success 6/3/04 11:16 AM EDT Bullish ADBL Update AMZN NFLX IACI Audible has positive operating earnings, is free-cash flow positive, and has no debt. However, consumers can be flaky, and customer acquisition costs could rise. The Numbers Audible (ADBL:OTC.BB) had approximately 344,000 subscribers as of last quarter. They pay $14 per month for a subscription to a periodical and one book or $19 for a periodical and two books. Additional items can be purchased at a la carte prices. The most recent data on revenue per average customer was $20 per month. Audible has positive GAAP operating earnings and is now free-cash-flow positive. The company considers itself fully funded with about $10 million of cash and no debt. There is only one published model for the company (by ThinkEquity Partners), and it estimates GAAP EPS of 14 cents on $42 million of revenues with 22% operating margins. The strength of Audible's model is it is basically a software model. Cost of goods sold is primarily the publishers' royalties, which are fairly stable at 20-25%. The analyst who first mentioned the company to me estimates the leverage in this model really kicks in once Audible reaches the 500,000 to 600,000 subscribers mark. Then Audible should achieve 30% net operating margins (after taking into account customer acquisition costs). On revenue of $60 million, Audible would have EPS of 20 to 25 cents. That's not bad for a company trading at $4 and growing 100% per year. These estimates do not assume much, if any, revenue from the educational market, which I view as the true killer market for Audible. The Intangibles Aside from Audible's really neat service, the solid financial outlook, and the breadth of market opportunities, what brings it all together is the lack of existing competition. The exclusive arrangements with the various publishers and the backing of outfits such as Amazon (AMZN:Nasdaq) (which owns 1.34 million shares), Bertelsmann (1.9 million shares), and Random House (2.06 million shares) have given Audible a nearly insurmountable head-start over any future competition. Audible has 166 different content contributors and was adding approximately 500 hours of new content per week as of last quarter. There are also talks of potential buyouts. Netflix (NFLX:Nasdaq) has been rumored to have started a dialogue with Audible, and the company would seem to be a very good fit with InterActiveCorp (IACI:Nasdaq). Amazon could also decide to "round up" its current investment. Lastly, Audible is pretty much unknown right now on the Street, in part, because of its low stock price. To address this issue, the company has proposed a reverse stock split, which would be immediately followed by a listing on the Nasdaq. There is talk that at least Piper Jaffray would then pick up coverage. The Risks Audible naturally carries many of the risks that small companies do. Consumers are flaky creatures. Customer acquisition costs have been volatile, and one must figure that to reach critical mass, at some point the company will probably have to dive into mainstream costly advertising. But, for the time being, Audible looks to me like a very interesting bet.