HIC & David
Here is some INFO by Scott Schiller on the KLOC thread. Very intersting. Very good work by Scott
Tuesday January 19, 5:05 pm Eastern Time
Company Press Release
Perry & Co. Announces Investment Opinion on Top 20 Internet Plays
to Keep an Eye On in 1999
LOS ANGELES--(BUSINESS WIRE)--Jan. 19, 1999--The Internet Stock Review
announced today a list of 20 companies to watch during 1999. The Internet Stock Review additionally announced enhancements to its web-site which is devoted to the coverage of internet related publicly traded companies. The site provides direct links to the web-sites of
Watch List companies and an easy to use and peruse--price and performance listing of internet related stocks and commentary from various Wall Street analyst who provide coverage on these stocks.
Changes to reflect the new additions to the Watch List will be implemented during the week of 1/18.
If you would like a complimentary subscription to the newsletter please send an e-mail to join-internetstockreview@sparklist.com without any text in the Subject line or Body of the e-mail.
The Watch list, which was released to subscribers on Sunday, January 10th, 1999, was created as a starting point for investors who are interested in Internet related companies. Roland Perry, editor stressed, ''the list is not a ''buy list'' but merely a collection of companies that for one reason or another--that we find to be extremely
interesting. The idea behind its issuance is to bring attention to the names and or to the existence of these companies (many of which have no coverage on Wall Street) and then to have the investors themselves, do the due diligence necessary to decide on their own, if any of the issues warrant an investment and when.'' The list below are companies which the review believes investors should call to request an investor package (phone numbers are included) and companies whose progress should be monitored. The Internet Stock Review will be following and
reporting on the progress of these companies and others during the coming year.
Prices are from 1/10/98.
Aim-Smart -- $2.87 (OTC: AIMS - news; a)(b)
Aim-Smart is seeking to bring 550 of the nation's largest malls and its stores to the Internet by offering free Internet access to their 25 million shoppers. Genius to say
the least. Aim-Smart is currently in the midst of a nation-wide rollout of its service and currently has 50 malls online. These are not the everyday malls, but rather malls which are owned and operated by some of the largest and savviest mall operators in the county. Aim-Smart counts among it's clients, The Rouse Co., Wells Park, The
Simon DeBartolo Group and Copaken, White & Blitt. Selling at a quarter of its high. Pure Internet Play. 310-826-6017. Web Site: aim-smart.com
American Interactive Media -- $4.06 (OTC: AIME - news)
Unknown content provider (ComedyNet) and Internet Service Provider for affinity groups, for who they provide private-brand ISP services. Mark Graff, President came from Graff Pay Per View. Selling for half of its high from last summer. Pure Internet Play. 212-835-8500. Web-Site: aime-inc.com
AllNetServices -- $2.75 (OTC: AWEB - news; a)(b)
AllnetServices.com Corp. specializes in the marketing and distribution of a broad range of products and services at wholesale prices to both consumer and trade customers. Its Internet-related businesses include: AllnetDirect.com, which lists over 45,000 computer-related products, similar to Insight.com (NSIT); GoingOnce.net, a 24-hour on line auction, similar to that of OnSale.com (ONSL); AllmonitorMall.com, the first Web site dedicated solely to offering all onitor-related merchandise; and atServices.com, which offers Web hosting, professional graphics design and animation, data base management and site development. The Company also operates its Monitor site in Spanish. Traded as high as $17 late in 1998. Pure Internet Play. 714-257-7902. Web-Site: allnetservices.com
Brilliant Digital -- $2.12 (AMEX: BDE - news)
And returning from the 1998 list ... is Brilliant Digital. After a less than Brilliant 1998
where they saw losses mount, here is the story: ''Brilliant recently unveiled its
new Multipath Movie enabled web site. In November Brilliant officially rolled out its
Webisode program. Webisodes are mini episodes, approximately 510 minutes in
length. Brilliant plans to make selected Webisodes available for free in a four-week trial
at multipathmovies.com. Following the free trial period, during
which users can view one new Webisode per week, future weekly Webisodes will be
available via subscription, starting at $8.95 for twelve weeks.'' You have to see
it to believe it. Let's give these folks another try. Internet and CD Rom Play.
818-615-1500. Web-Site bde3d.com
Borders Group -- $19.65 (NYSE: BGP - news)
$2.6 billion in sales and a $1.5 billion market cap. We'll take two please. Walden
Books, Borders, Brentano's, Planet Music and CD Superstore. Something has to
work out here. Everybody and their mother downgraded it on the 7th of January and
ran like scared puppies due to bad weather, with the exception of ABN AMRO,
who co-incidentally has a warrant to buy 1.8 million shares of Brilliant Digital.
Contrarians. Sells for less than half of its high in July. Internet beneficiary.
734-477-1100 Web Site: bordersgroupinc.com
CDNow -- $20.75 (Nasdaq: CDNW - news; b)
CDNow, which is acquiring N2K (NTKI) originally appeared on our Summer Watch
and now moves to our Internet/Music Watch List. We may be dreaming, but we
believe the combined company gets bought out. What they have going for them is an
established presence. What they don't have and what we can't envision them
having (with their current marketing and pricing habits) is profitability. The street is
expecting them to lose $2.84 this year and $2.91 next year. Sales for nine months
were $35 million vs. $9 million. It has a $376 millionmarketcap.com Pure Internet Play.
Half of its high, triple its low. 215-619-9900. Web Site:
cdnow.com
Comtex -- $0.62 (OTC: CMTX - news)
This year's penny play. Considering everything, this is one of the most interesting
companies on the list(s) and get this, it's profitable. Throw in a market cap of under
$5 million and we most certainly have one to watch. Three months reported sales were
$1.6 million vs. $1.2 million, earnings were $94,000. This is a very simple
business (news wire aggregator to web sites which need news) which is destined to
grow as the net grows. Destined. Sales for trailing twelve months were $5.8
million. Comtex Know News, but Nobody Knows Comtex. Pure Internet Play.
703-820-2000. comtexnews.com
CustomTracks -- $11.00 (Nasdaq: CUST - news; c)
From a press release dated December 17th: ''CustomTracks Corp. is developing a
large-scale custom music reproduction distribution system. This system will enable
consumers to select songs from different artists and labels, and CustomTracks will burn
these songs onto a personalized CD. Alternatively, CustomTracks intends to
offer individual songs for sale via download over the Internet. The Internet is changing
the way music is purchased, and we believe that CustomTracks is pursuing a
business plan that, if successful, will eliminate all meaningful competition for custom
music. CustomTracks is the brainchild of David Cook. Mr. Cook founded and
ran Blockbuster Video from inception until 1987. On February 27, 1998, he was
elected chairman, president, and CEO of CustomTracks (formerly known as AMTC
Corp.). CustomTracks is debt free with over $80 million in cash to pursue the custom
music business.'' Enough said. Pure Future Internet Play. 972-702-7055
customtracks.com
Digital Courier -- $7.06 (Nasdaq: DCTI - news; b)
Here's the official company byline: ''Videos Now, which debuted in November of this
year on AOL, AOL.com, and Digital City, offers one of the world's largest
Internet destinations for buying VHS and DVD movies. Not particularly cheap with a
$100 million market cap, but it has excitement potential, albeit from a yet to be
defined catalyst. Pure Internet Play. Been higher, been lower. We have no idea were it's
going, but it won't be unchanged. 435-655-3617. Web-Site:
videosnow.com
DYNAMIC MEDIA.COM -- $2.50 (OTC: DIMG - news; a)(b)
This will be the year for DYNAMIC MEDIA and its collection of multi-media sites.
DIMG has the nation's only fully multi-media news source which covers headline
news, sports, health, business and entertainment. Has had a number of Internet only
exclusives such as interviews with Brett Favre, Randall Cunningham, Burt
Reynolds and Michael Jordan. DYNAMIC MEDIA.COM boasts many areas in which
to hit a home run, without the high cost risks traditionally associated with
entertainment companies. With cutting edge technology and leading the internet with
24-hour streaming media, DYNAMIC MEDIA.COM in association with its
partnerships, becomes the model entertainment company of the next millennium.
The company additionally produces audio and video press releases and produces
internet trade shows. Operates an Web designer temp agency that counts among its
clients US Interactive, Major League Baseball, Pfizer, Sony Music, Computer Graphic
Training Center, and the National Football League.
Traded strong on the news last Friday that its multi-media sites received a major
visibility boost through an association and front page placement on RealNetworks
(RNWK) RealGuide. AV DailyNews.com can now be found side by side with
ABCNews, CNN News, ESPN and Sportsline. With 43 million registered users, a lot
of people are going to learn about AVDailyNews.com. Pure Internet Play. Middle of its
trading range. 800-700-0295. avdailynews.com
DynamicWeb Enterprises -- $3.37 (OTC: DWEB - news; a)(b)
DynamicWeb, also called, ''EDI meets the web.'' If you believe industry reports that
70% of e-commerce will be business-to-business you have to follow the
progress of DynamicWeb. For the record, the dollar estimates are $268 billion for
business to business e-commerce vs. $25 billion for consumer e-commerce. EDI,
quite simply, is how big business conducts and transacts business between themselves.
It has been for years and probably will remain so for many more to come.
What DynamicWeb offers is a way for small businesses to conduct and transact with the
big boys via the Internet/EDI versus the more costly PrivateNetwork/EDI.
Signed Raymond James as its investment banker this week.
In its short history DynamicWeb has been able to sign a number of Fortune 500
companies. The current (and expanding) client roster includes Linens N Things
(NYSE: LIN - news) Rite-Aid (NYSE: RAD - news), Service Merchandise (NYSE:
SME - news), Southern New England Telephone (NYSE: SBD - news), Russ
Berrie (NYSE: RUS - news), GTE (NYSE: GTE - news) and Church & Dwight
(CHD). Pure Internet Play. 973-276-3100.
EchoStar -- $49.75 (Nasdaq: DISH - news)
If ever we saw news that could justifiably propel a stock 20 points higher, it was the
news EchoStar released last Friday. In one sentence; Echostar announced that
WebTV will now be available via satellite--as no phone line--as in no 56k modem
slowdown. This could create an explosive opportunity for the company and for
interactive video and content providers.
EchoStar's satellite broadcast will incorporate the best features of Internet sites with
interactive multimedia, accessible by a click of the mouse -- or remote control. In
addition to on-demand interactive multimedia, the service will offer the ability to
download software, games and electronic publications ... to televisions and personal
computers, all delivered through an 18-inch satellite dish.'' Where do we sign up?
As a side note; companies on the Watch List who could benefit from this speeding
delivery of Internet access are America Interactive (AIME), Brilliant Digital (BDE),
DynamicMedia.com (DIMG), MediaLink (MDLK), Playboy (PLA) and MediaX
(MXMX). MediaX in particular has announced an agreement to be one of the primary
providers of content to EchoStar. How the street, which has become so quick to pick
up on significant news events, missed this one is beyond us. Internet
Beneficiary. Paine Webber initiated coverage this week. 303-723-1000. Web-Site:
echostar.com
Federal Express -- $88.00 (NYSE: FDX - news)
We can't add much value here other than to point out the obvious. Who is going to
deliver all the books, cd's and more importantly business to business shipments of
goods such as stationary, parts and supplies. Probably the closest thing to a ''safe play''
on the long term growth of the Internet. Trades at half the market cap of
Amazon. How does 20% annual growth for the next 20 years in a row sound? It's
possible. 10 years from now, this call will make us famous. Have your broker
Fedex the certificates to you. Internet beneficiary. 901-369-3600. Web-Site:
fdxcorp.com
Fingerhut -- $16.25 (NYSE: FHT - news)
It's just a matter of time before they change their name to FingerHut.com. The hand
writing is on the wall. If ever there was a company that could naturally make a
progression from print (catalog) to the Internet, it has to be Fingerhut. They're making
money, they have money, their products enjoy healthy profit margins and they
don't have to pay the gate-keepers to attract surfers to their sites. Nice. Has stakes in
PC Flowers, MountainZone and Freeshop among others. Internet beneficiary.
612-932-3100. Web-Site: fingerhut.com
First Net Technologies -- $3.25 (OTC: FNTT - news)
Here is the official company byline: ''1st Net Technologies Inc., is a full service Internet
design, creation and hosting company, catering specifically to publicly traded
companies and the financial communities. 1st Net specializes in database capture,
management and Internet marketing. The company owns and operates various online
newsletters, a financial online community Web site and a well-established 3-year old
Internet Mall.'' They have a beautiful site and have spared no expense on its site
with regards to financial disclosures. The site answered most of our questions so we'll
simply point out the URL. Pure Internet Play. 619-675-4449. Web-Site:
1stnettech.com
Harmony Holdings -- $1.15 (Nasdaq: HAHO - news)
Harmony Holdings is an Internet play ? Well ... not exactly. Harmony Holdings is a
Internet beneficiary ? Well ... not exactly. But it does sell for just 15% of sales
and two times book. They are one of the premier producers of television commercials
and music videos in the country, so chances are that they're going to discover
the Internet and we rather follow their possible progress into it, rather than after it.
Granted it's a stretch, but we guess the entry would probably be suggested by their
majority shareholder (44%), Children Broadcasting Corp (Nasdaq: AAHS - news).
612/338-3300. Web-Site theend.com
curiouspictures.com
ICC Technologies --$4.50 (Nasdaq: RRRR - news)
Is this a ''young'' USWeb (Nasdaq: USWB - news) in the making? From the looks of
their work (web-sites), and the acquisition spree they're on, we think it just
may be. We discovered this company via a press release that announced they had
redesigned the Individual Investor web-site. Not for the faint-of-hearted with a $100
million market cap. 212-634-6950. Web-Site: raremedium.com
Individual Investor -- $4.87 (Nasdaq: INDI - news)
Individual Investor as successfully graduated from print (where they have 500,000
subscribers) to the Internet, without the typical rise is share price. Current market
value is $41 million vs. $16 million in sales. We would carefully monitor the progress of
the revenues generated by its web-site and examine the relative ratio analysis
as compared to CBS MarketWatch. Recently reported that paid web site impressions
increased to 4.1 million in December. Internet Beneficiary. 212-843-2777.
Web-Site iionline.com
iParty -- $4.56 (OTC: IPTY - news)
iParty has a number of interesting qualities, one of which is that the Chairman is also the
Chairman of Wit Capital and the former head of investment banking for
Salomon Smith Barney from 1993 to 1997. Equally interesting is that Sam Belzberg is
on the board of directors. Here is the official company byline, ''iParty
(www.iparty.com) intends to become the leading Internet resource for consumers
seeking party planning advice and information, party services, and party goods. It
expects to launch its web site in late 1998.'' Well alrighty then. Did a reverse merger to
land on the bulletin board. Very light on the financial reporting other then to
say there were 11,000,000 shares outstanding as of July 15th, 1998. Pure Internet Play.
Web-Site: iparty.com
Kushner-Locke -- $11.37 (Nasdaq: KLOC - news; a)
Lots of activity and lots of reporting on their majority owned 1-800-US-SEARCH
division. Recent 13D filing by Gruber & McBaine, a San Francisco based
investment firm. On December 29th the company reported sales increased 33% from
$56 million to $75 million and a narrowing of losses. A recent brokerage firm
report (dated June 98) estimated that its 80% interest in the 800 Search division could
contribute up to $30 million to KLOC's fiscal 1999 revenues with pre-tax
margins ranging between 12-15%, after start-up costs. Plenty of interesting events to
monitor here. Internet Beneficiary. 310-445-1111. Web-Site:
kushner-locke.com
MediaLink -- $11.75 (Nasdaq: MDLK - news)
Medialink is a worldwide provider of video and audio production, distribution and
public relations services for businesses and organizations seeking to communicate
through TV, radio and other media. For the nine months ended 9/98, revenues rose
63% to $29.7 million. With a market cap of only $62 million, MediaLink runs a
real possibility of finding itself on the auction block. Despite sharply increasing revenues
and earnings, the stock of the company has been plunging much like CKS
Group did last year (which was bought out) after reporting good, but less than expected
results. Down from $28. Internet Beneficiary. 212-682-8300. Web-Site:
medialink.com
MediaX -- $2.43 (OTC: MXMXD - news; a)(b)
We would describe this company as a leading edge developer of web sites which are
designed to sell merchandise that relates to some of the nation's (world's) top
artists and celebrities. It takes about five seconds at the Rod Stewart Live.com web site
to see that the tech team behind this company -- is without any question -- one
of the best in the country.
The game plan is fairly simple and straight forward. First, find a hugely popular artist
(music, film, etc.) and create a web site that will draw huge crowds by virtue of
that star or celebrities popularity. Next, keep the crowds there by loading the site with
contests, chat, interviews, sound clips and photos.
Last, enable the site to generate revenues by selling merchandise (tickets, records,
videos, tee-shirts, etc.) which relates to the celebrity.
As we mentioned earlier (Echostar), MediaX has been selected by Echostar to provide
content for it's interactive Television offering. This is a potentially huge outlet
for MediaX to offer its goods which are greatly enhanced by a high-bandwidth service.
Look for launch of Amuznet.com. Down from $12. Internet and CD Rom
Play. 310-815-8002. Web-Site: mediax.com
Playboy Enterprises -- $18.00 (NYSE: PLA - news)
If ever there was a ever a natural progression from print to the Internet (besides
Fingerhut), it has to be Playboy. Playboy should be able to easily move to and benefit
from the Internet in the area of subscription sales, in advertising and in merchandise
sales. While the company has publicly stated it presently has no plans to spin of its
Internet division, we believe it is inevitable in light of the oversized valuations
commanded by Internet companies. Ask yourself this question. Would you buy shares
in a spinoff called Playboy.com? Action in CBS Marketwatch (Nasdaq: MKTW -
news) IPO today all but assures a spin-off of Playboy.com. Internet beneficiary.
312-751-8000. Web-Site: playboy.com
Sportsman Guide -- $6.75 (Nasdaq: SGDE - news)
Call it what you want; K-Tel potential (Nasdaq: KTEL - news) or Sky-Mall potential
(Nasdaq: SKYM - news), Sportsman Guide has it. And it is easily the cheapest
stock on this and almost any list. The only thing better than their sites potential is their
valuation. Do we foresee a name change to SportsmanGuide.com? SGDE
currently sells for 8 times earnings and 20% of sales. The company has 1,000,000
customers and distributes 70,000,000 catalogs annually which could lead to a
convergence of bringing customers to the web-site without paying the gatekeepers while
at the same time reducing costs as shoppers move from the catalogs to the
postage free Internet. Internet Beneficiary. Down from $11.50. 651-451-3030.
Web-Site: sportsmansguide.com
You Bet International -- $8.75 (OTC: UBET - news)
You Bet!, Inc. announced in June the public release of the You Bet Network, the only
interactive online horseracing network in the U.S. As America's first and only
interactive online horseracing service to enter the market, You Bet provides members
the ability to watch and wager on a wide selection of coast-to-coast thoroughbred
and standard-bred horseracing, via its exclusive private closed-loop network. Members
have 24 hour access to the network's features, including live racing from a
choice of over 15 racetracks across the country, commingled track pools, live
audio/video, up-to-the minute track information, real-time wagering information, and
value-added handicapping products. We met with management yesterday and saw the
product in action. Unbelievable. Nobody knows them. Internet Beneficiary.
Hitting new highs. 310-444-3300. Web-Site: youbet.com
UOL Publishing -- $5.50 (Nasdaq: UOLP - news)
We'll simply quote the Chairman, ''I am energized by the promising results of the
Company's Web-based strategy. Since the VCampus(a) was first launched, we
have delivered over 100,000 courses to more than 70,000 students through 35
institutional partners. Our customers include major universities and Fortune 500
companies with access to approximately 500,000 potential students. We believe that
the Company has reached a critical mass of online customers that requires the
undivided attention of the management team. In the future, our primary goal will be to
provide Web-based training and education. In short, now is the time to focus on
our core mission -- to build the world's largest Web-based training and education
company.'' Pure Internet Play. Down from $16. 703-893-7800. Web-Site:
uol.com
USWeb -- $30 (Nasdaq: USWB - news)
USWeb is the only other company (see BDE) to graduate from the 1998 list to the
1999 list. The name should be changed to reflect the merger with CKS Group which
was also on the 1998 list, to Re Invent. Quite simply, USWeb is the biggest and best
Internet consulting firm on the planet. Clients include Schwab, Toshiba, NBC,
McDonald's, General Motors ... you get the idea. This is a company that will most likely
reach $1 billion in sales in 4-5 years. Internet Beneficiary. Wildly volatile.
Web-Site: uswebcks.com
Zapata -- $13.00 (NYSE: ZAP - news)
Controversial to say the best. Hated to say the worst. They decided to get into the
internet, then they decided to get out and then they decided to get in again. Can't a
guy change his mind? In any event should they decide to move ahead with their plans, it
should make for some extremely interesting reading throughout the year.
713-623-0060.
(a) Client Company.
(b) Summer Watch List Company.
(c) Internet/Music Watch List.
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