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Non-Tech : Valley Media (VMIX) IPO -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (129)	5/14/1999 2:36:00 AM
From: dmkst1	Respond to of 298

VMIX mainline distribution business should grow at the rate of music/video/DVD according to the portion of each that it sell plus whatever it came gain from other outfits. The internet business should grow at the rate of internet business growth - at current pace the internet segment growth rate with more closely mimic the top line growth rate as internet sales become a larger segment of sales. Currently about 1/6 of sales. My guess is that if the internet segment growth slows from 1000% to 500% yoy then to 200% yoy at that point the internet portion will become the lions share and will approximate overall top line growth. In the current virgin release it mentions some distribution of books- expanding offerings could also expand revenues-adding to above revenue growth rate. This is how rev growth can begin to look more like an internet retailer. I don't know how much in sales you could expect from internet service and information - this is probably more useful to close the deal in more cases for retailers. What would be nice is if the company had somethin else up their sleeve which would leverage their proximity to the internet in terms of sales. BTW- are we sure about the may 20th earnings reporting date. good luck Jimb

To: Glenn Petersen who wrote (129)	5/14/1999 9:20:00 AM
From: Paul Hackett	Read Replies (2) \| Respond to of 298

>>>>>VMIX will never command an "Internet valuation." It is a distributor and distribution is a low margin business which generally does not command a premium valuation. You need to also bear in mind that Internet related sales account for only about 20% of VMIX's business, though that segment is going to grow more rapidly than the other parts of VMIX's business. Given that, I think that the company will command a moderate premium over other distributors and the stock should move back into the 30s.<<<<<<<<< VMIX is THE Internet e-commerce music distributor. Internet e-commerce is a low-margin business, why should AMZN or anyone else have a high valuation? I think a good argument for VMIX being given a higher valuation is because it is NOT a traditional distributor due to it's agreements with e-commerce retailers. Also the risk and the competition is minimal, what other large companies can make that claim? They're in a great position right now, and I'm not aware of anyone challenging them. These factors should also contribute to a higher valuation. The only reason that sales account for only 20% of total revenues is because e-commerce is so new. Within one-year of 4/99, at anything near current growth rates, VMIX' New Media division will probably surpass traditional store sales. Within 2 years, it will more than double them. I think the 30's are a low-ball short-term starting price. I like this stock a lot.