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Microcap & Penny Stocks : ProNetLink..(PNLK) -- Ignore unavailable to you. Want to Upgrade?

To: Go Fast who wrote (2038)	5/4/1998 11:30:00 AM
From: ztect	Respond to of 8242

First, let me apologize to Alec for sharing his private message. I'm only doing this because I think he's raised some valuable issues. Alec wrote as follows, ztect, yes, I should have stated my intention at the outset. Sorry. I don't like hype either. I am long on PLNK because they are first to offer a comprehensive site for international trade. They appear to be aggressive in news releases. And they are in a hot sector. However, I will not fall in love with the stock. The BB tends to be a junkyard of stocks long on hope but short on substance. That's why I need a price target and justification for that target. You have to figure that even if ProNetLink acquires 100,000 subscribers, that's only $36 million or less than $1 per share. Give it a P/S of 5 and you have a $5 stock. On the other hand, Internet search engines get a P/S of 27, so maybe it's worth $20. What's your assessment of PNLK's valuation? =================== To which I responded =============================================== Actually and honestly I have no clue. I agree with everything you say. Stocks in hot sectors are hard to evaluate strictly in regards to their P/E's. Most are bought and sold on hype and emotion. Most of these internet stocks don't have earnings and most never will Look at the prices of the search engines, and those that provide retail sales. Both of these sub-sectors have lots of competition, and one can even question the psychology of retail sales without human interaction. That PNLK has any projections of earnings in this sector, with a strong UNIQUE service priced reasonably makes you wonder what the price of this company today would be if it were offered traditionally as an IPO on the NASDAQ . It would be most likely way, way overpriced, and I would never have touched it. All the insiders on the IPO would have made the bucks, and every and any lemming would have jumped on board. I don't think everyone realizes what they have bought yet. BTW- As a good historical model of the "hot sector" phenomena. Look at the biotechs in the early nineties....this is a more accurate way to access "hot" sector stocks. For every one or two biotechs that could justify their P/E's, there were about thirty that couldn't. Those that couldn't rose fast and crashed quickly.