Email : info@otcjournal.com
URL : http://www.otcjournal.com
To
OTC Journal Members:
This week's
Trading Alert is a company which we first looked at in early October when
the stock was over $5. Since then we have been waiting for a low in the
stock price associated with a lighter volume. Market technicians will tell
you this signals a good entry level for a stock.
After several
days of euphoria for Bulls, the last two days of market action should
have blown out any weak hands in this stock. Today's reversal in the NASDAQ
was awesome, and indicates the Bull may return in force. In addition, we
have seen some microcaps that we follow bounce nicely in the recent run-up,
suggesting that the worst is over, and it is time to begin bargain hunting.
Tomorrow's GDP number may cause a major bounce in the NASDAQ, leading to
additional upside pressure on the stock.
Tax selling
in small issues has been particularly viscous this year. We attribute this
to gains that many investors locked in during the 1st Quarter. Since then
investors have had their brains beat out. Now they are selling the small
issues to avoid the tax burden. Look for this end of the market to do well
in November, and really get strong in December.
 |
Trading
Alert: uDate.com, Inc (OTC BB: UDAT); Web Site: www.uDate.com |
|
We have been
watching uDate since mid September, and waiting for a high percentage
entry point. This company has been growing dramatically. Today's press
release covering the 309% growth rate after the market closed
coupled with the major pull back in the NASDAQ suggest a great entry point
for this stock. This stock could trade up beautifully tomorrow especially
if we are lucky enough to get a good bounce in the market.
UDate.com
is the premier singles community on-line. It is the Internet version of
the Personal Section of your local paper. Professional Matchmaking has
been around for centuries, and the Internet is the ideal mechanism to deliver
this service.
The company
launched its community earlier this year, and the membership has grown
dramatically. Currently, there are over 875,000 registered members.
As we write this Trading Alert, the community has 4081 people
on line simultaneously, and 2779 new members have enrolled today
(1:15 Pacific Time according to their web site).
UDate
has begun converting their trial members into paying subscribers. In the
last ninety days they have converted nearly 75,000 trial subscribers
into paying members. The average membership fee is $22 monthly.
Some have been converted long term, others for a short period of time.
Currently, the company is generating $300,000 a month in revenues,
and based on current conversion rates the company anticipates it will generate
roughly $450,000 in November.
The only viable
competition to uDate is Matchmaker.com, which sold to Lycos this
past August for $50 million. uDate's technology is
superior and allows the member to search for a match based on any criteria
they choose. Matchmaker's technology works only off demographic information,
leaving the user with limited search parameters.
The company
has some interesting and creative marketing strategies which are yielding
many new members every day. Eventually, this community could grow to millions
of paying subscribers as use of the Internet on an International basis
for matchmaking purposes increases.
In today's
news release the company indicated they expect to turn profitable in the
first quarter of 2001, suggesting the stock could rebound to its previous
high of $9 over time.
 |
Special
Offer |
 |
As usual, we
have come up with a special way for our members to experience this unique
Internet community. Go to the site (http://www.udate.com)
and register for a trial membership. The send an email to info@udate.com
with your name and password. Identify yourself as an OTC Journal member,
and your membership at uDate will be upgraded to Gold Membership.
This will give you complete access to every part of the site. Your free
trial will last 10 days. Single members might want to take advantage of
this free offer to improve your social life. Investors should also take
advantage of the offer in order to experience all the features of the community.
|
Trading
Alert Details |
|
In our opinion,
the pullback in the stock on light volume represents an excellent entry
point. Today's news release should stimulate significant volume.
For those of you who look at Level II quotes, there are only 500 shares
at today's closing offer of $3.625. There are only 2000 shares offered
for sale between $3.625 and $4.25.
Here are our
thoughts on this particular Trading Alert on uDate (OTC BB: UDAT):
-
Buy up to $4.25.
-
Set your Stop
Loss at $2.625 (The all time low of the stock) or what ever your risk tolerance
is.
-
If the stock
can get through $5.125 within the next five trading days, it could go straight
to $6.
These numbers
are
our opinion only, and not a solicitation to buy this stock. Make up your
own mind. If you are looking for a short term trade limit your loss if
the stock goes against you. As always, we remind you to review the section
on our home page on Trading
Alerts, paying particular attention to the section on trading rules.
The track record on our previous alerts can be obtained by
clicking
here.
Here is today's
news release in its entirety for your review:
Thursday October 26, 4:19 pm Eastern
Time
Press Release
SOURCE: uDate.com Inc.
uDate.com Reports Record 309%
Growth in Third Quarter Revenues
NEW YORK, Oct. 26 /PRNewswire/ --
uDate.com (OTC Bulletin Board: UDAT - news), today announced 309% growth
in third quarter revenues, up from $132,000 in the three months ended June
30, 2000 to $542,000 in three months ended September 30, 2000.
Subscriptions revenues make up 86%
of the third quarter revenue total. Seventy-five percent of uDate's members
who have paid for the service are still active and paying today. ``We believe
that the day of the 'free model' and a total dependence on advertising
revenues has passed. Our third quarter results illustrate that uDate provides
a service that adds significant value to its members' lives,'' said Mel
Morris, uDate's Chief Executive Officer.``
With a registered membership closing
on 1 million members, a 'killer' application that keeps users on the site
for up to 4 hours each day and a powerful geographic, demographic and psycho-graphically
indexed database, an increasing number of businesses are looking to explore
partnership opportunities with uDate.
In the third quarter, 19% of uDate
revenue came from advertising and the company anticipates launching a targeted
advertising and product promotion service in the middle of fourth quarter
to increase its revenue from this source. Offers Morris, ``Our ability
to target advertising content and product offerings is in a different league
from the Advertising networks. We know our members in tremendous detail
and every page we serve is individually customized for each and every user.
We can finely target in a way that has yet to be experienced on the net.''
uDate already has a number of partnership programs looking to leverage
these capabilities in various stages of development. The company expects
these partnerships will add further functionality and content to its site
while creating strong incremental revenue opportunities.
uDate is now entering its second
growth phase. ``The third quarter was characterized by aggressive sales
and marketing aimed at leveraging our product in order to develop the uDate
brand,'' explained Morris. ``Sales and marketing costs for the quarter
were high as a result of our efforts to rapidly establish a critical mass
of registered members necessary to broaden our market appeal. Now we are
close to the million member level we are able to concentrate our efforts
on converting our registered members into paid subscribers and encouraging
our active members to introduce their friends to our service as part of
an extensive viral marketing program.''
With the enhanced marketing focus,
uDate anticipates converting more members to paid membership programs,
while simultaneously reducing costs. According to Morris, ``Results for
October to date show that we have been able to reduce our marketing costs
by more than 65% while continuing to grow our registered membership count
at a rate of 100,000 new members per month.'' With revenue increasing in
the fourth quarter to more than $1 million, cash burn is expected to reduce
significantly and turn positive by the turn of the year. The company is
looking forward to profitability in the first quarter of 2001.``
Morris attributes uDate's rapid advances
to the company's ability to identify and respond to the changing market
conditions since its financing. As he explains, ``Prime movers in this
market sector were raising capital and attempting to build large registered
memberships from 1997 on. At this time, development capital was freely
available and lenders had little concern for revenues or profitability.
The results of these efforts saw businesses claiming registered memberships
of several million users. However, more detailed analysis showed very poor
levels of conversion from registered to paying members and very poor levels
of paying member retention.'' A ratio of $100,000 to $150,000 in monthly
membership subscriptions per million registered members is fairly typical
in this sector.
``By entering the market sector some
time after the prime movers and in 'more realistic' market conditions,
uDate has been able to take advantage and avoid the mistakes of its forebears'',``
continues Morris. At the end of October 2000, uDate will have more than
900,000 registered members generating monthly membership subscriptions
of $300,000. This makes uDate two to three times more effective on the
basis of membership revenues per registered member.
During the third quarter, uDate also
selected both Stanton Crenshaw Communications (Best Mid-Sized PR Agency
by PR Week) and UK-based Mantra to handle their strategic marketing.
``Our high priority branding efforts,
combined with outstanding creative, will enable us to generate high visibility
for the company,'' said Morris. ``We expect those efforts to translate
into an increase in paying members, media coverage, analyst awareness and
a strong investor following.'' uDate operates a unique, high-quality online
singles community that stresses service, efficiency and personal security.
Its vaunted technology enables members to identify, communicate with and
meet people who are psychologically, culturally, educationally and demographically
compatible. The company's state-of-the-art database, web site design and
matchmaking features surpass the most professional off-line services and
separate it from the competition. Individually customized page views provide
members with the capability to meet compatible and interesting new friends
in a fun and effective way.
This press release contains forward-looking
statements, within the meaning of the Private Securities Litigation Reform
Act of 1995, about the Company's business and products, projected revenues,
expenditures and operating and capital requirements. Statements that are
not historical facts, including but not limited to statements (a) that
include the words ``will,'' ``believes,'' ``expects'' ``anticipates,''
``estimates'' or words of similar importance or meaning; (b) that describe
any of the Company's or management's plans, objectives or goals for future
operations and products, or (c) that concern the characteristics and growth
of the Company's markets or customers or products or the expected liquidity
and capital resources of the Company, are forward-looking statements. All
forward-looking statements are subject to certain risks, uncertainties
and assumptions, including changes in the market conditions in the industries
in which the Company operates.
SOURCE: uDate.com Inc. |
|
