To: michael r potter who wrote (2686 ) 4/24/1999 4:58:00 PM From: michael r potter Respond to
-OT-Knight Trimark NITE follow up. NITE was started in 1995 by a group of 27 online brokers who needed a technology driven co. to collect and trade their orders. I went back to the SI thread when first started. Posts were few, and the optimists projections of earnings and likely PE ratio were in hindsight, vastly underestimating the coming reality. This company is on a tear. There has been much discussion of expanded trading hours to accommodate the millions who work during market hours. This is coming and soon. Along with the already fast growth in internet trading, these evening hour sessions will encourage and allow much more trading activity to take place. NITE will benefit from both trends. Competing transaction systems are being initiated like Island, but NITE is already getting involved in this. They will be opening in London May '99. When first started, they elected to locate in New Jersey to avoid the high costs associated with New York. This is a highly volatile stock and profits [and more importantly perceptions and stock price] swing in exaggerated form with market downturns and a slowing in volumes. That said, the overall trend is playing right into their hands and with latest Q engs. showing a more than tripling of profits on a triple in sales, they are not only riding the E-trading boom. they are increasing market share vs. the competition [yr. ago, 10% mkt. sh. 1st. Q,'99 15% and April so far, 18%]. One of my concerns was their exposure as a market maker [having a large inventory of stocks] during a market downturn. They have been profitable every day recently, despite some days recently where the NASDAQ was down around 5% and I'net stocks even more. Unlike most other I-net stocks [including many internet brokers] where investors are putting up with losses and paying a price for what the company could be many years hence, this is a way to play one of the most explosive growth areas of the internet and get a company with substantial current profits. Like they say, this is not a recommendation to buy or sell, information is believed to be accurate, but not guaranteed.. As stated earlier, SWS Southwest Securities owns 1.7M sh. of NITE, and they reported last week a 55% increase in engs. to $.70 sh. This is a $42 stock [with almost $20 being their value ownership in NITE. In other words, back out their ownership in NITE and the market is valuing SWS at around $22]. Thats .70 for the quarter! Even value buyers should have their antanae up on this one. My approach is to have a modest position in each, then if the market has one of its frequent hard selloffs, to add on dips. If they get away on the upside, then there is some ownership. Remember, volatile-, but volatility can be a friend, as witnessed by SFEs performance this year. Hope you are enjoying the weekend. Mike
