Newsletter
Stockgroup.com's Plan to Roll Out a New Online Investment Community
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| August 27, 1999 |
Volume II,
Issue 38
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Email : info@otcjournal.com
URL : http://www.otcjournal.com
To OTC Journal Members:
Here is our August Profile:
One quick comment first. If you feel as if you missed the boat on NetSol International (OTC BB: NTWK) when it traded as low as $2, this month's profile is for you. NetSol was our January profile at $3.75. After seeing a short term high of $4.50, the stock retreated to $2. Today it trades above $5, ensuring that all of our members are making a profit on this stock. Your profit could be as low as 37% from the profiled price, or as much as 250% if you had the courage to buy at the bottom. The company recently applied for a NASDAQ listing and has tremendous momentum.
There are a lot of great opportunities around resulting from July's market drop. We have seen these seasonal fluctuations in the past. Once we get past Labor Day and people return from their vacations and get refocused on business. Volume will pick up. Stocks that have been oversold will rebound easily. The company we are profiling today fits that description perfectly. Read this and see if you agree.
Stockgroup.com Holdings, Inc.
- Corporate Web Site: www.stockgroup.com
- Ticker Symbol and Exchange: SWEB on the NASDAQ Bulletin Board
- Estimated Shares Issued and Outstanding Fully Diluted: 9.6 million
- Estimated Public Float: 3.2 million
- Closing Price and Volume: $3 on 16,700 shares
- Market Capitalization: $28.8 million
- 52 High and Low: $10.25 x $2.00
If you invest in Internet related stocks, and are looking to benefit from the dramatic drop in these stocks over the last several months, then our August profile, StockGroup.com Holdings, is definitely one you should carefully consider. The Company is making a rapid transition toward a whole new level of service for its target market.
Despite a recent decision to invest a substantial amount of capital in advertising with many of the Financial Media Giants, the Company currently trades at more than a 50% discount of previous levels achieved back in March and April of this year. In our opinion, it's only a matter of time before this stock retraces up to it's previous levels and beyond.
A simple rebound to April's pricing would result in a 50% to 80% profit from today's trading levels. We are anticipating this turnaround to begin in September, and therefore are bringing this information to you far ahead of the rest of the investing community.
We believe StockGroup.com
will become the largest investment community for small and micro cap investors,
an area that has been completely overlooked by the financial community
despite the fact that there are an estimated
27 million small cap investors
in
North America.
Internet Communities
The Internet is changing and evolving at light speed. The last time anybody thought of Yahoo! (NASDAQ: YHOO) as a Search Engine, the stock was trading at $15 on a split adjusted basis.
The use of the Internet is growing at an exponential rate. To put it in perspective, it has taken the Internet two years to obtain the same number of users that took the automobile industry twenty years.
The new buzz word on the Internet is "Communities". Loosely defined, an Internet Community is a central location on the Web where people go for a variety of services and information with a common theme or interest. For example, many investors are familiar with thestreet.com, an Online Financial Community offering financial related content, resources, chat rooms, and other related services. The more people within the community, the more value it creates. It's that simple. Billboard space along highways costs more when they're along the 10 Freeway in Los Angeles as opposed to Route 80 in Nebraska simply because more eye balls see the billboards. Internet Communities are no different, just more profitable in many cases.
Yahoo! probably has the most widely used communities for affinity groups. The investment related section of Yahoo! has an extraordinary amount of traffic. Their quote section alone is rumored to get over 4 million page views per day. Millions of investors use this resource regularly, and this has resulted in Yahoo!'s outstanding performance as both a stock and a company over the past several years.
StockGroup.com's vision is
to be the dominant source of news and information for more than 27 million
micro and small cap investors, in addition to 12 thousand small and
micro cap companies.
Stockgroup.com's Plan to Roll Out a New Online Investment Community
Stockgroup.com has been developing what we believe to be the premier Investment Community available on the Internet today exclusively for small and micro cap Investors.
On April 22nd, Stockgroup.com completed a private placement of 750,000 restricted shares at $6 per share, resulting in $4.5 million in proceeds. On May 19th, Stockgroup.com completed a second private placement on 150,000 shares at $6, yielding a total of $5.4 million of new capital raised for the Company with a cost basis of $6 per share. If you wish to review the press release on the financing, simply click here.
Therefore, investors at today's levels can pick up free trading shares at one half the cost that institutional investors paid for restricted shares just four months ago. Thanks to recent weak market conditions particularly in the Internet Sector, here is an opportunity for the Individual investor to profit ahead of the sophisticated institutions.
StockGroup.com has been investing its capital toward developing a new Internet Community that will be the premier Internet Community for small and micro cap investors. A "Soft Launch" of the new site is scheduled for September 13th, and the formal official launch is scheduled for unveiling on September 28th.
We had the privilege of sneak previewing this new and dynamic format and all of the planned content for the site, and we believe this site will become very heavily trafficked by investors over the coming months.
Forty designers and editors have been working 'round the clock preparing resources and content geared exclusively to small and microcap investors. It is easy to obtain volumes of information off the Internet on the several hundred most heavily traded large cap stocks. However, there are roughly 4,000 small and micro cap stocks not properly being covered as it exists today. The editors at StockGroup.com have been gathering information on these Companies for months. Investors are hungry for information on these stocks, but are often frustrated by the lack of coverage. StockGroup.com will provide the solution.
StockGroup.com has compiled
information on these 4,000 companies, and will provide one-stop shopping
and research for individual and institutional investors.
Driving Traffic to the New Site
Just after this New Community goes live, Stockgroup.com is planning a major media advertising campaign to promote the New Portal. $1.5 million in advertising dollars will be invested in the first six weeks.
The ad campaign strategies have already been planned by Rocket Science, the company's New York based ad agency. Click Here to read the press release. Rocket Science has created a very clever ad campaign, and the creative force behind this campaign was the same one responsible for the famous phrase "Oh What A Feeling, Toyota".
The final contracts have not been signed yet, but we can tell you that the Company is planning to run 95 15-second commercials per week on the Major Financial Related Television Networks.
In addition, major campaigns have also been planned for print media, which will also be in the household names that are financially related. In all, the $1.5 million which will be spent over a six week period beginning the first week of October will create 148 million Ad Views in a six week time frame.
Marcus New, the President of StockGroup.com has been a frequent guest on CNBC, CNNfN, Bloomberg Radio, Investors On-Line, and many other financial shows. He has also been a speaker in front of the New York Society of Security Analysts, which was rebroadcast on NBC's Private Financial Network.
In mid September, unveiling Road Shows are planned for New York, San Francisco, Toronto, and Vancouver. Marcus New will also be making numerous guest appearances on TV and radio to promote the existence of the site.
Their existing site has already gotten a fair amount of favorable publicity. It was rated the #1 Investment Site by Lycos for a 17 month stretch, and it was also picked as the Microsoft Investment Site of the Week.
The introduction of the New Community will generate a great deal of publicity for both the site and the stock.
Comparable Companies and Valuations
The following is a table of companies
and their valuations that we can compare to Stockgroup.com.
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FWEB |
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MKTW |
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MCSN |
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TSCM |
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SWEB |
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A quick look at this table leads one to conclude that Stockgroup.com is clearly the most undervalued stock listed above. In addition, Stockgroup.com has been profitable and has financed its initial growth by generating revenues. Once the capital was raised to take Stockgroup.com to the next level, only then were losses incurred.
TheStreet.com is our favorite comparison. The company is annualizing at $12.8 million and lost $22 million over the last four quarters. Yet, the market still places a $455 million valuation on the Company.
Based on June's financial results,
Stockgroup.com
was
just under $2 million behind theStreet.com in annual sales, while
only losing 1/10th as much money, yet has a market value of only 5% of
theStreet.com.
If Stockgroup.com can obtain 25% of the market valuation enjoyed
by theStreet.com, the stock will be trading at just under $12 per
share, a 400% increase from today's levels.
Current Financial Condition
As of Stockgroup.com's June filing with the SEC, the company had $8.6 million in assets, of which $8 million were in cash, receivables, and short term investments.
Stockgroup.com had approximately $1 million in short term payables, leaving shareholders' equity of $7.4 million. This qualifies Stockgroup.com a NASDAQ listing, with the exception of the $4 stock price.
In fact, back on May 19th, Stockgroup.com filed an application for a NASDAQ listing. The application was subsequently withdrawn when the stock fell below $4 since the Company didn't meet this one minimum listing requirements.
All of Stockgroup.com's financial
statements can be found by clicking
here. Any review of their financial condition reveals a company
that already has the financial capability to launch its business plan and
meets the minimum qualifications for a full NASDAQ listing. The only
thing left is a $4 stock price for thirty trading days. If this is
achieved, investors at the current level will enjoy a 33% return on their
investment.
Conclusion
The valuations being enjoyed by companies like theStreet.com and Marketwatch might seem ridiculous. The market believes that theStreet.com is worth nearly $1/2 billion based on $12.8 million in sales and $22 million in losses. Marketwatch is trading at $4/10 billion coming off 16 million in losses on $12.3 million in sales.
Internet Investors understand why these Communities can trade at such strong valuations. These Companies are all growing exponentially. Investor allegiance is being created. More eyeballs are looking at these sites and using the resources every day.
Traffic on these virtual streets is growing. Their content is prolific enough for investors to need daily. Advertising revenues are increasing, and fee based subscription services are beginning to generate substantial revenues.
People will become more sophisticated and selective about the communities they choose to frequent.
There are 27 million small and microcap investors that have been completely neglected by the larger more exposed Internet companies. No one has committed the resources required to provide a quality community for these investors. Just last year one of our editors was watching an interview with the CEO of a dental laser company. The stock had appreciated from $2 to $23 over the previous several months, and the interviewer at CNBC kept asking the CEO how he could justify the current market value of the Company.
As we were watching the interview we couldn't help wonder why CNCB didn't interview this CEO when the stock was $2. That is when we would have liked to known about it.
If we had heard about it at $2, it would have been very powerful to immediately go to a financial community that could provide us with everything we needed to know about the Company in one quick stop. This tool does not exist, but it will in the middle of September, and investors will go there.
Today, Stockgroup.com trades in relative obscurity. The high profile nature of their new site will inevitably bring new interest into the stock, and if a NASDAQ listing can be obtained, this will open the doors to a whole other world of capital.
We remind you again- If Stockgroup.com
can obtain 25% of the market valuation that theStreet.com enjoys,
the stock will trade 400% higher than it is today. Stockgroup.com
is enjoying nearly as much in revenues, and much lower losses. Their
new site and enhanced content will be introduced in several weeks, and
it will contain 40 times the current content with approximately 20 contributing
editors in New York, San Francisco, and Vancouver. Consider this
one seriously for the speculative end of your portfolio.
Links to Free Downloads
Disclaimer
The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. All statements and expressions are the sole opinions of the editors and are subject to change without notice. This profile is neither an offer nor solicitation to buy or sell any securities mentioned. This newsletter is owned by SSP Management, Inc, a wholly owned subsidiary of 1st Net Technologies, Inc ("1st Net"). While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. The editor, members of the editor's family, and/or entities with which they are affiliated, may own stock in and have other financial dealings with the companies who appear in the publication. To that degree, this newsletter should not be regarded to be an independent publication. SSP Management, the owner of the OTC Journal, has been paid the following fee by Incite Marketing Group acting on behalf of Stockgroup.com: $50,000 in cash, 40,000 shares of restricted stock which will not become free trading until at least August of 2,000, and 100,000 options with an exercise price of $4. The OTCjournal.com critiques may contain forward looking statements relating to the expected capabilities of the companies mentioned herein.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.
We encourage our readers to invest
carefully and read the investor information available at the web sites
of the Securities and Exchange Commission ("SEC") at http://www.sec.gov
and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com.
We also strongly recommend that you read the SEC advisory to investors
concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm.
Readers can review all public filings by companies at the SEC's EDGAR page.
The NASD has published information on how to invest carefully at its web
site.