Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cyberian Outpost (Symbol: COOL) -- Ignore unavailable to you. Want to Upgrade?

To: GuitarMan who wrote (1090)	2/5/1999 10:14:00 AM
From: Platter	Respond to of 1932

From Briefing.com...Presentation made by Darryl Peck, CEO and Katherine Vick, CFO. Extremely well attended, Cyberian Outpost appears to be an acceptable Internet ecommerce to some institutions, even though institutional ownership is low (just 533,600 shares are owned by 8 mutual funds; float is 13.6 million). Cyberian Outpost relationships with "blue-chip" internet companies like AOL, USA/Today and Time/Warner may make it more attractive. Even if they don't own it, however, institutional investors are extremely curious about Cyberian Outpost. Highlights from the presentation: Total of 260,000 customers. 150,000 products, $94 million run rate Had first $1 million day on 11/30 Have exclusive ecommerce deals with USA/Today, Time-Warner Pathfinder, and Scandinavian Online web sites. Only seller of HW/SW on those sites Acquired internet shopping network (ISN) in effect, because all sales on that site are routed to Outpost.com. Strategy for future: Build brand through alliance and marketing Have 15,000 "affiliate network" Linked sites get 3% commission on items sold Have an email direct marketing strategy, customize emails by past buying habits For example, if you bought a PC last time, but didn't buy printer, they put printer specials on pages when you come back next time Will make personalized web experience a critical differentiator. You can specify "don't show me any IBM products, etc." Total worldwide computer products market is 50% international, COOL making big push for global, have sites in 9 languages now. 15% of all sales YTD have been international Jupiter Consulting gives following figures for year 2002: Computers: $10.5 Billion, 8.6B Travel, 2.2B books, 1.2B music Average order size: $250 Customized upsell technology increases margin: Buy a notebook with 5-8% margin, if you can sell a leather case with 50% margin, you double actual dollar profit on transaction. Web site intelligence does the upsell, based on what you ordered. Major push coming to increase ad sales on site $750,000 Revenue/employee 40% Q-Q sequential growth in revenue Key Drivers for the company: Scalable operation: get more profitable as revenue grows Revenue Model: 3Q99 Target Gross Margin 10 15-16 S&M 37 7 G&A 5 1 R&D 4 1 EBIT (36) 6 Working Capital model very efficient, as receivables are paid in 7 days, Inventory days are 15, Payment days are (30), so net working capital is (8). Negative working capital helps cash burn rate Fulfillment done by RenTrack company. Take order by 12 midnight, still shipped FEDEx for next day delivery Briefing.com commentary: Cyberian Outpost and ONSALE are going to be great to watch. The paradigm of At-Cost transaction based revenue, versus slim margin sales should be interesting to watch. Mr. Peck is adamant that the At-Cost method is "not any way to build a business." We tend to agree, but what if it works? Cyberian Outpost stated they will not reach a breakeven revenue model until mid 2001. That's a long, long time in the Internet world, especially if things change. ONSALE, after all, was practically forced to change the At-Cost model because everyone seemed to be passing them by with their current models. We aren't wild about COOL as a stock, because the margins are so slim, meaning any slipup can have huge ramifications. However, the scalability is a beautiful aspect, and it COOL can just make it to a larger revenue vendor, they may find a sustainable long term position. But they aren't there yet.