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<<Chatfield Dean & Co. releases research report on Pro Net Link Corp.
Business Wire - May 14, 1998 16:31
%CHATFIELD-DEAN %COLORADO %BANKING V%BW P%BW
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GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--May 14, 1998-- Chatfield Dean & Co., Inc., today released its research report on Pro Net Link Corp. (OTC.BB: PNLK.BB/(PNLK.OB)), with a SELL recommendation in a two-page research reported entitled "Fundamentals do not support current valuation; buyer beware."
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Rating: SELL
Analyst: Cheryl J. Bostater
Industry: Web based Importer/Exporter Content Provider
OTC.BB: PNLK.BB/(PNLK.OB)
Fundamentals Do Not Support Current Valuation: Buyer Beware.
Recommendation: SELL
Price at time of Sell Recommendation: $8.00
Risk Rating: Extremely Speculative
- Pro Net Link is grossly overvalued with a current market capitalization of approximately $300 million, based on a recent stock price of $8.00, with 37,849,500 shares outstanding.
- Glenn Zagoren, the company's marketing person, claims the financial projections on www.stockgenie.com are inaccurate.
- Pro Net Link is a start-up company with no historical revenues to date, and a net loss from August 1, 1997 to May 7, 1998 of approximately ($363,000).
- In our opinion, the Company does not have the capital to successfully market its website, with only $485,314 of cash on hand and a credit line of $500,000 as of May 11, 1998, according to their press release. With liabilities of $399,291, the Company has shareholders' equity of only $86,023. The Company's balance sheet as of May 7, 1998 shows cash of $335,314, liabilities of $399,292 and shareholders' equity of a negative ($20,055).
+ The Company has no proprietary technology.
OVERVIEW
Pro Net Link Corp. has licensed a worldwide database of 1.5 million companies from Dun & Bradstreet, and is in the final stages of launching a web site for locating manufacturers or potential buyers of products. The web site is intended to be capable of sending immediate requests for product price quotes, generating the international paperwork required to carry out a transaction, determining international trade rules, arranging for the printing of color brochures, finding exchange rates, and arranging financing. Pro Net Link supposedly has developed banking relationships designed to assist the buyer and seller in completing their product transactions. (See www.stockgenie.com for a further description).
SUMMARY AND INVESTMENT THESIS
Based on a recent stock price of $8.00 and 37,849,500 shares outstanding (of which only 7,749,500 are free trading), the Company has a current market capitalization (value) of approximately $300 million. We asked the Company to disclose who owned the remaining 30,100,000 shares and they responded that they were not required to disclose that information.
According to Glenn Zagoren, the Company's marketing person, the projections on www.stockgenie.com are inaccurate, and Mr. Zagoren was unwilling to provide us with the Company's true projections. Companies typically pay for the reports presented on the stockgenie web site. Regardless of what the Company's projections are, a company with no revenues, historical losses, no proven market acceptance, little marketing dollars to launch a worldwide marketing campaign for its website, and no proprietary information is barely worth $1 million. If the Company's projections are right and they can get 40,000 subscribers in 12 months and 80,000 subscribers in 24 months, then the Company may be worth a lot more in the future, but to say it will be worth $300 million in the future is pure speculation, and to say it is worth $300 million now is outrageous. In addition, as with any start-up company, projections are typically rarely obtained.
With a current market capitalization of approximately $300 million, based on a recent stock price of $8.00, with 37,849,500 shares outstanding we believe Pro Net Link is grossly overvalued. Based on the following investment considerations, we rate an investment in PNLK shares with a SELL.
MANAGEMENT
According to the Company's 15c2-11 SEC filing on February 24, 1998, the following are the executive officers and directors of the Company:
- JEAN PIERRE COLLARDEAU - President, Founder, and Director. According to the Company's press release dated April 27, 1998, Mr. Collardeau has been involved in international trade and finance for the last 30 years, with expertise in matters relating to international banking, rules and regulations. In 1968, he was a director of Ascom S.A. in Kinshasa; in 1978, he was President of R.B.A.C. Ltd., in Lagos, Nigeria; in 1988, he was a negotiator for Fiat-Impresit; and for the last ten years, has supervised commercial operations and foreign investments from the European Community to African developing countries. - ALVINA COLLARDEAU - Secretary/Director
SELECTED RISK FACTORS
- Early Stage Company. The Company is in the early stages of marketing its website. There is no assurance the Company will be able to successfully implement its business plan or that its website will be accepted by potential customers. - No historical revenues and large historical losses. For the period from August 1, 1997 to May 7, 1998, the Company had no revenues and losses of ($362,793). There is no assurance the Company will be profitable in the future or that the Company will generate significant revenues. - Revenues are highly dependent on the Company's ability to market its website. The Company intends to market its website with MSN, AOL, Compuserve, WorldNet and Prodigy, as well as through trade associations. The Company may not have the financial resources to launch such a broad marketing campaign, and history has shown that successful websites require traditional advertising approaches such as newspapers, magazines, television, and radio. - Extreme stock price variability, large overhang, and lack of liquidity. The Company currently has 37,849,500 shares outstanding of which only 7,749,500 are free trading. In addition, there has been extreme volatility in the stock price of PNLK. The stock is traded OTC and therefore, is subject to a general lack of liquidity as compared to larger NASDAQ companies. - No proprietary technology. The Company has not developed any proprietary technology and most of its current content has been licensed from other sources.
All investments involve risk. The risk inherent in a particular security may not be appropriate for you. Please consult with your Chatfield Dean Account Executive to obtain assistance in selecting appropriate investments.
This report is published for informational purposes only and is not to be construed as an offer or the solicitation of an offer to sell or buy the security. The information contained herein is based on sources that we believe to be reliable, but we make no guarantee or representation about the completeness of the statements or summaries of available data contained herein. This information is provided as of the date of this report, is subject to change without notice. Furthermore, the information in this report should be considered outdated 90 days after publication, or such earlier date as circumstances may require, and should not be relied upon thereafter to develop investment strategies. Shares of Pro Net Link Corp. may not be eligible for purchase or sale in a particular state. Chatfield Dean & Co. does not make a market in the securities of Pro Net Link Corp. Additional information may be obtained at http:\\www.chatfield.com.
CONTACT: Chatfield Dean & Co., Inc., Greenwood Village
Analyst: Cheryl J. Bostater, 303/740-0006 |
