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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: redwood who wrote (5980)	1/12/1999 4:21:00 PM
From: Mr_X	Read Replies (1) \| Respond to of 18998

This may not reproduce so well, but I couldn't figure out how to attach an acrobat file to the post. This is the much featured "Wake up call" from Yorkton Securities. Yorkton is not a bucket shop. They are legit. There is also a spreadsheet, which I figured would just look like a mess if i tried to copy it. If any one knows how to post an acrobat file, let me know and I will post the file here. This report is based on information available to the public. Information presented, while obtained from sources we believe to be reliable, is not guaranteed either as to accuracy or completeness. Estimates and projections contained herein are Yorkton's own or obtained from our consultants. This report is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned herein. This research material is approved by Yorkton Securities Inc., which is regulated by SFA for the conduct of investment business in the U.K. Approval is only to the extent defined in Section 57 of the Financial Services Act 1986. The investments or investment services, which are the subject of this research material, are not available for private customers as defined by the SFA. Yorkton Capital Inc. accepts responsibility for the contents of this report and U.S. persons receiving this report and wishing to effect a transaction in any security described herein should do so with Yorkton Capital Inc. Yorkton Securities Inc., Yorkton Capital Inc. and their respective officers and directors has, or may have, a position or holding in, or may effect transactions in the investments concerned, or related investments, and is providing, or has provided within the last three years, significant advice or investment services in relation to the investments concerned or related investments. Yorkton Securities Inc. has or may perform financial advisory, investment banking, or other services for the companies mentioned herein. Copyright Yorkton Securities Inc. under the Berne Convention. All rights reserved. No part of the publication may be reproduced without the written permission of the publishers. Printed in Canada. THE WAKE UP CALL Knowledge Industries January 12, 1999 BID.COM INTERNATIONAL INC. (BII $7.60, TSE) Recommendation: SPECULATIVE BUY 6 to 12-Month Target: N/A Mark Pavan (416) 864-3559; mpavan@yorkton.com Internet stocks continue to appreciate. Implied value from comparables is now in excess of C$10.00. BID.COM continues to trade extremely high volume as its U.S. peers continue to trade upward. We believe there is an opportunity for further significant increases this week as more investors become aware of the increased interest in this story. We also note that with the stock above C$1.75, the company should receive an additional C$10 million in cash from the exercise of warrants on the past three financings. As a result, our recent concerns about the company' s cash reserves have been alleviated. We have attached a comparable table to this comment outlining the present value of BID.COM. Although we remain surprised by the lofty valuations in this sector, we note that BID.COM is still significantly undervalued in the context of its comparable companies. We estimate that fair value for BID.COM, in the context of the current market, is about C$10.00. We note that this value is based on Q4 F1999 revenues and does not include any future estimates for sales growth. Our price target is based on run rate sales. We also note that BID.COM has recently signed agreements with Rogers New Media in Canada, which is arguably the largest Internet media company in the country. Internet commerce continues to grow faster than expected. Boston Consulting Group recently reported that sales through online retailing should exceed US$13 billion in 1998. Sales continue to increase at over 100% every six months. America Online (AOL, NASDAQ) recently reported that it generated US$1.2 billion in holiday sales for its retail partners, which include BID.COM. We expect these trends to continue throughout 1999, although we are continuing to forecast a moderate slowdown in the summer months and a corresponding increase in e-commerce throughout the fall/winter of 1999/2000. After discussions with management, we are reducing our F1998 revenue estimate from C$24.9 million to C$21 million and our F1999 revenue estimate from $79.8 million to C$60 million. We note that these reduced revenue expectations should be offset by increased gross margins (5 to 10% over the next several quarters). We continue to recommend that investors Buy BID.COM stock. However, due to our perceived risks in the e-tailing sector, including high competition and a rapidly changing marketplace, we are maintaining our Speculative Buy recommendation and recommend that only those investors with a high risk tolerance purchase stocks in the e-tailing sector. Yorkton Securities Inc. has acted as agent for financing of or financial advisor to BID.COM International Inc. within the past three years. Previous Day' s Volume: 7.0 million 12-Month High-Low: $7.60-$0.56 Shares Outstanding: 43.3 million Market Capitalization: $329.1 million Float: 38.2 million Float Value: $290.3 million