"According to Gayle Essary, Investrend president, Mr. Dutton reinstated his recommendation at $3 1/16 on October 16 in Investrend's PAR Research Notes, published daily on Investrend's web site at www.investrend.com. Starnet's current price is $4 5/8. A copy of the report, including in Adobe pdf format, is available from the Investrend web site at www.investrend.com."
"The reinstatement of the recommendation of Starnet, withdrawn in September due to the RCMP raid, is based on:"
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Investrend Research Announces Investment Opinion on Starnet Communications, Inc.
Business Wire, Oct 21, 1999
Business Editors
NEW YORK--(BUSINESS WIRE)--Oct. 21, 1999--
Starnet Communications, Inc. Recommendation of Starnet Communication (OTC BB:SNMM) as a STRONG SPECULATIVE BUY is reinstated by PAR analyst based on clarifying situation. The new update report on Starnet is being distributed by Investrend Research.
An update report covering Starnet Communications, Inc. (OTCBB:SNMM) by PAR Supervisory Analyst John M. Dutton was issued today by Public Analysis & Review (PAR), the unique professional independent analyst program administered by the non-profit Investors Research Institute, Inc.. PAR reports are distributed by Investrend Research. According to Gayle Essary, Investrend president, Mr. Dutton reinstated his recommendation at $3 1/16 on October 16 in Investrend's PAR Research Notes, published daily on Investrend's web site at www.investrend.com. Starnet's current price is $4 5/8. A copy of the report, including in Adobe pdf format, is available from the Investrend web site at www.investrend.com.
The PAR report contains the reasons given by the analyst to reinstate Starnet his investment recommendation. They are summarized as follows: The reinstatement of the recommendation of Starnet, withdrawn in September due to the RCMP raid, is based on:
Legal Risks Assessable: The favorable ruling of Judge Williamson on October 15th to grant Starnet's Motion, and then immediately deny Las Vegas Casino's request to stay the ruling, has contributed substantially to the legal situation at SNMM becoming more quantifiable. There are risks to any legal process. However, based on talks with the Company, it appears the Crown (the British Columbia authorities) would need to greatly stretch to bring and obtain a conviction on gambling charges exceeding inadvertent misdemeanor violations of the bookmaking statutes. More serious charges would carry an attendant heavy burden of proof and legal extrapolation, which the Company does not feel either the facts or evidence can support. After talks with the Company and its General Counsel, we expect the Company can address the remaining legal issues effectively, and pursue removal of the Crown's restraining order on its cash.
Growth in Franchise Value: Starnet is a leading player in the Internet gaming industry. Its licensees account for over 35% - 40% of all Internet gaming sites. Its license-marketing utilizes strong sales and marketing programs, offers the most extensive gaming venues, and has a low initial license fee. Pari-mutuel products will be introduced shortly and its World Gaming 2000 software is expected to be introduced early in the new calendar year. Starnet now has the largest number of licensees of any company at 51, up from the initial 1 in Q4 of fiscal 1998. The culmination of its licensing efforts will be an increasing and diversified license portfolio participating in the net revenue streams of its 51 or more licensees. At its present size, earnings can also grow from internal means, as well as by the sale of additional licensees. Significant internal profit gains can be achieved over time by introducing programs aimed at assisting licensees improve their operations and marketing, and hence net revenues. By any measure, we believe the present "franchise value" of Starnet far exceeds its present market value.
Starnet Communications, Inc. Recommendation of Starnet Communication (OTC BB:SNMM) as a STRONG SPECULATIVE BUY is reinstated by PAR analyst based on clarifying situation. The new update report on Starnet is being distributed by Investrend Research.
An update report covering Starnet Communications, Inc. (OTCBB:SNMM) by PAR Supervisory Analyst John M. Dutton was issued today by Public Analysis & Review (PAR), the unique professional independent analyst program administered by the non-profit Investors Research Institute, Inc.. PAR reports are distributed by Investrend Research. According to Gayle Essary, Investrend president, Mr. Dutton reinstated his recommendation at $3 1/16 on October 16 in Investrend's PAR Research Notes, published daily on Investrend's web site at www.investrend.com. Starnet's current price is $4 5/8. A copy of the report, including in Adobe pdf format, is available from the Investrend web site at www.investrend.com.
The PAR report contains the reasons given by the analyst to reinstate Starnet his investment recommendation. They are summarized as follows: The reinstatement of the recommendation of Starnet, withdrawn in September due to the RCMP raid, is based on:
Legal Risks Assessable: The favorable ruling of Judge Williamson on October 15th to grant Starnet's Motion, and then immediately deny Las Vegas Casino's request to stay the ruling, has contributed substantially to the legal situation at SNMM becoming more quantifiable. There are risks to any legal process. However, based on talks with the Company, it appears the Crown (the British Columbia authorities) would need to greatly stretch to bring and obtain a conviction on gambling charges exceeding inadvertent misdemeanor violations of the bookmaking statutes. More serious charges would carry an attendant heavy burden of proof and legal extrapolation, which the Company does not feel either the facts or evidence can support. After talks with the Company and its General Counsel, we expect the Company can address the remaining legal issues effectively, and pursue removal of the Crown's restraining order on its cash.
Growth in Franchise Value: Starnet is a leading player in the Internet gaming industry. Its licensees account for over 35% - 40% of all Internet gaming sites. Its license-marketing utilizes strong sales and marketing programs, offers the most extensive gaming venues, and has a low initial license fee. Pari-mutuel products will be introduced shortly and its World Gaming 2000 software is expected to be introduced early in the new calendar year. Starnet now has the largest number of licensees of any company at 51, up from the initial 1 in Q4 of fiscal 1998. The culmination of its licensing efforts will be an increasing and diversified license portfolio participating in the net revenue streams of its 51 or more licensees. At its present size, earnings can also grow from internal means, as well as by the sale of additional licensees. Significant internal profit gains can be achieved over time by introducing programs aimed at assisting licensees improve their operations and marketing, and hence net revenues. By any measure, we believe the present "franchise value" of Starnet far exceeds its present market value.
Stronger Company: With the addition of Meldon Ellis, Esq., Corporate General Counsel, the senior management team of Starnet is being effectively expanded. Since the first press release of Claude Levy which caused market confusion, management has dealt effectively with a series of crises while focusing on building and restructuring its business. We expect management will continue to restructure Starnet to avoid many of the pitfalls that are clearer today. Senior management is more mature and experienced, coupled with impressive middle management personnel.
At present prices, there is substantial upside potential but the ongoing legal process will be closely monitored.
John M. Dutton, Analyst
Mr. Dutton is the supervisory analyst of PAR. He is a member of both the Boston and Los Angeles Security Analyst Societies, and has been an analyst and director of research at several firms including Moseley, Hallgarten, Estabrook & Weedon and LH Friend, Weinress, Frankson & Presson. He was president of Corsair Asset Management, an asset management firm, for over 11 years. For seven years, he was executive vice president of the international hospital company American Medical International. Mr. Dutton's past work includes development and execution of strategic and financial planning for small cap companies. Mr. Dutton presently is presently responsible for the expansion of the PAR program.
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