Excellent post by Jenesis on Stockhouse.com
Posted By Subject PostTime (EST) Post ID
Jenesis NASDAQ and Future Potential 4/11/99 / 1:21:44 AM
There has been much discussion in recent posts regarding the pending Nasdaq listing and comments from so call "expert" Analysts such as Duncan Stewart (Navigator Fund manager), an assistant UBC Professor, Adam Adamou (Taurus Capital), etc. For what its worth, I like to make the following comments:
1) Nasdaq - This is imminent; exact date is of no consequence. BII has met all listing requirements contrary to some misleading posts. I doubt Godin would even attempt to apply for a Nasdaq listing if there was any chance BII would NOT qualify. The potential risk from the negative publicity following rejection would be suicide for Bid.com Also, Nasdaq would not reserve Naz ticker symbol "BIDS" to Bid.com if rejection was contemplated.
2) Analysts Comments - When it comes to Inet stocks, I have yet to hear any favourable/ positive comments from ANY so-call experts. They use traditional methods for stock valuations (ie: earnings, P/E ratios, etc,). So, current Inet valuations just blow their minds. Therefore, they will avoid and not take the time to do the detail research of Inets. Unfortunately, when asked, they seem to give everybody the impression they know are the "expert" on the topic. Using an analogy - How can one drive anywhere or see where one is going if he is looking at the rearview mirror to get his bearings? This is how I view what Analysts (Duncan et al, etc) are trying to do when evaluating Inets. Duncan Stewart said he won't buy BII (over priced) but he also said he wouldn't buy Yahoo as he doesn't think these Inets will be around a couple years from now.
Inets are so new, they have no track record, everyday is a new beginning. Traditional methods of evaluation DO NOT APPLY. I learn many years ago that the only person that will look after your money is you. So do your own DD (due diligence).
3) BII's Valuation - IMO, in the short term Nasdaq, Bid.com will be valuated by typical market forces (supply and demand) and will be priced appropriately similar to other Inets. My analysis of 28 recent (Jan-Mar31/99) Inet IPO's (www.investoroutlook.com/aftermarket.htm) show an average 1st Day Closing price ($42.71USD) increase of 147% from the initial IPO offering price ($17.32USD). Although BII technically is NOT an IPO, but because it will be listed inside the USA for the 1st time (and thus more easily traded/ followed by US investors), one may apply this valuation to BII (ie: 1st Day Close on Nasdaq will be approx 150% increase from pre-Nasdaq). Surprisingly, this is within the conservative range (ie: $50 USD) that some posters have speculated and also of recent (April) IPO debouts ($50-$80USD range).
For longer term, once US Investors learned more about Bid.com. (thru increased exposure, success of FRB and US Brokerages/ Sponsors, Shop N@ked launch, etc) and realize the potential of this company compare to the eBAY's, UBID's, ONSALES, etc. they will learn that Godin's comment that Bid.com "...has the potential to be bigger than any of them." may not be unreasonable. When that comes, BII's share value, IMO, will be priced accordingly.
4) Future Outlook - Bid.com is a DYNAMIC company that is still in its infancy like the e-commerce industry. The explosion of business web sites, interests, activities, etc on the Internet within the last year should dispell any non-believers to the success of this culture change. To recent investors who may not be aware of the explosive potentials of this company, consider the following points about Bid.com:
> Strong balance sheet, no long term debt; BII has adequate cash to go forward on its 1999 plans.
> Strong strategic partners - AOL, Rogers, Torstar, 24/7 Media, American Interactive Media (AIM), DG Jewelry, etc.
> Strong Management - has vision/ ability to foresee and position BII to advance/ exploit potential of emerging e-commerce industry. Has demonstrated/ proven their ability to achieve/ execute their business plan(s) to perfection.
> Evolving/implentation of business-to-business pipeline will add to revenue streams.
> Diverse HIGH Margin Revenue Streams.
- alliance with DG Jewelry to sell jewelry.
- sale of on-line advertising thru 24/7 Media (in USA) and Rogers (in Canada).
- Michael Jordon video & other Micra Sound Cards
- Licensing technology.
> Global/ International Presence - potential Europe, Australia and Asia luanches. European launch expected any time (Dublin, Ireland office).
> Broadband (Cable) Presence.
- Real time full motion audio, video and interactive auctions.
- Cable access via agreements with AIM (in USA/International) and Rogers News Media (in Canada).
- Cable joint ventures offer MASSIVE exposure for BII (ie: 90 million TV's vs 30 million PC/Internet users in USA alone). Tremendous potential growth.
> Competetive Advantages.
- 90% revenue in $USD but operating costs are in $CD (ie: Canadian company); cost advantage over US companies.
- Unique migratable technology. Recipient of three Canadian Information Productivity Awards (CIPA) for its on-line auction technology and top honours with Best of Show Award.
- No inventory liability for unsold goods (ie: carries no inventory).
- 3 year worldwide EXCLUSIVE electronic distribution of Michael Jordon Video Cards.
> Hiring of Financial Relations Board (FRB), a world leading PR firm to educate/ inform and attract the US investment community to Bid.com
IMO, its only a matter of time before BII's story is told to a broad American audience and its enormous potential/ growth appreciated compare to other Inet companies.
Enough said, many have bought into the BII story, have taken the time to do their own DD, and feel very comfortable with holding this stock for future rewards. I hope recent investors who jump aboard do not lose heart, get distracted and be "spooked" by BII's volatility. This is a typical process by the "pros" to "shake down" a stock. Its purpose is to weed out weak investors, create an opportunity for MM's to accumulate cheaper stock and usually happens prior to an anticipated stock "break out" for a known significant event. In general, the more stock MM's have, the more control they have in maintaining an orderly market. This is good for investors as potentially an orderly market means "smaller" price swings!
Those novices who are waiting for the Nasdaq launch - expect the "mother of price swings" at least for the first week or so. If you don't have the stomach for it, I suggest you cash out and wait to enter when the waters are smoother.
Good luck to all.
J |
