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Technology Stocks : Booking Holdings (formerly Priceline) -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (995)	4/30/1999 7:51:00 PM
From: coachbobknight	Read Replies (4) \| Respond to of 2743

here's the part about options on pcln increasing the cap... Before jumping on the Priceline bandwagon, though, investors should take a close look at the company's prospectus. Here are a few points worth noting. * While Priceline has 143.2 million shares outstanding after the IPO, it's got a lot more common share equivalents, including 23.8 million shares issuable based on options that exercise at just $1.25 per share. Delta also has warrants for 18.6 million shares that exercise at $0.93 per share. Even without getting into other potential dilution down the road (the total is on the order of 54.1 million shares), that gets us to 186 million shares, putting the current adjusted market cap at around $15.4 billion. So the company is even more expensive than it looks. A lot more expensive. * Priceline operates what it calls an "adaptive marketing program." Under this program, for example, a customer who offers to buy an airline ticket can -- at no additional cost -- have her offer price automatically increased by $50, likely assuring she gets the ticket. All she has to do is apply for a credit card. That is, by signing up for another service, a customer gets Priceline to make up the $50 difference with revenue it gets from program sponsors. Though Priceline generated just $4 million in revenue last year from this program, it's very high margin revenue, accounting for a significant percent of gross profits. While almost all this revenue has come from fees paid by Capital One (NYSE: COF) for qualified credit card applications, Capital One is bailing out of the program at the end of April. First USA will take it over, but the terms of this new arrangement appear somewhat more restrictive. Plus, First USA can terminate the deal after the first year. * Priceline's airline participation agreements also permit the airlines considerable flexibility. They don't require the airlines to make tickets available for particular routes, to provide a specific quantity of tickets, or to provide tickets at any set price discount. These deals can also be "terminated upon relatively short notice." Moreover, Delta signed on only after Priceline gave the firm the right to approve or reject new carriers and to restrict the volume of tickets and routes offered by certain carriers. "Accordingly, Delta could limit our ability to expand our business through the introduction of new carriers or the expansion of the routes for which we offer tickets," reads the prospectus. While I find Priceline's model and execution compelling, the current market price is another story. Interested investors would do well to study the prospectus and to research whether the company's patents really provide the barrier to entry that the bulls suggest. by Louis Corrigan techstocks.com so now with the price increase...the addition to market cap is about 9-10 billion...so this stock actually has a market cap of more than 30 billion... expect barrons to say some negative things this weekend... any other questions about market cap... as for shorting, once again, virtually every house allows shorting of pcln except schwab and etrade... amtd, yes, waterhouse, yes, DLJ, yes...