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If you are reading this message in plaintext or if you have an AOL address = you must click on this link: http://www.smallcapnetwork.net/archive/listser= v/20020127-1.html and wait for a web page to automatically open up to prop= erly read this newsletter.=20 [IMAGE] =09 [IMAGE] Dow Jones [IMAGE] 9840.08 + 44.01 8:08 am EST, Sun., January 27, = 2002 [IMAGE] NASDAQ [IMAGE] 1937.70 - 4.88 For info, visit www.smallcapn= etwork.net . [IMAGE] S & P 500 [IMAGE] 1133.28 + 1.13 To be removed, ple= ase click here . [IMAGE] Russell 2000 [IMAGE] 479.35 - 0.38 VOLUME 02:= ISSUE 8 =09 [IMAGE]=09 When Hell Freezes Over That was the overwhelming reply from experts when= asked when Amazon.com (AMZN ) will show a profit. This past Wednesday the= company reported $1.12 billion in sales during the last three months of 20= 01, a 15 percent increase over the $972 million recorded in the same period= a year earlier. International sales grew an impressive 81 percent. [IMAG= E]The biggest surprise was that earnings came in at $5 million, or a penny = per share. Who said pennies were obsolete? That one penny of profit per sh= are helped push the company up over 42% for the week. Could this be the be= ginning of the internet renaissance? Has the time come for internet compan= ies to show the world that they are real companies with business models tha= t can make money? Well, we won't go that far. The past two years has been= dismal for internet land. Thousands of internet companies sunk faster than= the Titanic. Famous flameouts such as Pets.com, Webvan and eToys became t= he butts of every dotcom joke. When Jay Leno makes fun of internet compani= es than you know things are really bad. However, at some point the laws of= Darwin were bound to take over the internet sector. A look at today's st= ock market shows just a few dotcoms. Some will inevitably burn through the= remaining cash that was raised during the happy go lucky IPO period. Othe= rs will be acquired or just perish. What people maybe missing is that ther= e will be survivors that make it. Some will actually thrive and develop in= to very strong companies. Ultimately, the internet has made life more conv= enient for the masses. The challenge is to make this convenience into somet= hing people will pay for. So who will be the survivors? There are approx= imately total 65 companies with a .com still in their names that are tradin= g in the major indexes (NYSE, AMEX, NASDAQ). One of the most promising dot= coms is once high flier Stamps.com (STMP ). [IMAGE] If you don't know alre= ady, the company allows people to print postage from their printer. All yo= u need is a PC, an internet connection and a free downloadable software pro= gram. Stamps.com makes money by charging a monthly recurring "convenience = fee". The service launched in October of 1999 and currently they about 300,= 000 clients. The company is currently trading near its 52-week high at $4= .25 but far from the $90 per share it once traded at. Stamps.com's market = capitalization is at a very rich $215 million dollars but with over $194 mi= llion in cash and cash equivalents the valuation is justified. CEO Ken M= cBride who was the former CFO, took over the top spot in August 2001. He h= as been with the company since its pre IPO days. Once Ken became the new C= EO, the first thing he did was to cut costs across the broad. Capital pres= ervation was the only way for the company to survive long term. The monthl= y burn rate was reduced from a loss of $11 million per month to a break eve= n business by the end of 2001. Going forward, Stamps.com has a product co= de named Net-Stamps that is in beta trial with the U.S. Postal Service. If= this product is approved then users can print generic sheets of stamps rig= ht off of their printers. Net-Stamps should help the company boost the numb= er of customers because the current Internet postage software is designed m= ore for heavy users. For some customers it is inconvenient to get online a= nd purchase postage every time postage is needed if the volume is minimal. = The recent Anthrax scare has increased interest in the company by governm= ent agencies. The Internet postage has a unique digital signature on each p= iece of mail that is traceable to the sender. A push by the USPS for Inter= net postage would be an enormous catalyst for the company. One of the big= gest potential clients for Stamps.com could be the direct mail industry. T= he general public is much more reluctant to open any mail that is unsolicit= ed. However, if the Internet postage became a seal of quality or assurance= it could help the industry tremendously. There are other players in the = industry but over 80% of the market is dominated by Stamps.com. The compan= y has a boat load of cash and expects to achieve profitability the first qu= arter of 2002. The company has done an excellent in executing initiatives= that will guarantee its survival. Although Wall Street no longer follows = the company, people are beginning to take notice of Stamps.com. If the com= pany is able to achieve profitability this quarter then we can officially i= nduct it into the dotcom Hall Of Fame. =09 D I S C L A I M E R :[IMAGE] The SmallCap Digest is an independent electro= nic publication committed to providing our readers with factual information= on selected publicly traded companies. SmallCap Digest is not a registere= d investment advisor or broker-dealer. All companies are chosen on the basi= s of certain financial analysis and other pertinent criteria with a view to= ward maximizing the upside potential for investors while minimizing the do= wnside risk, whenever possible. Moreover, as detailed below, this publicat= ion accepts compensation from third party consultants and/or companies whic= h it features for the publication and circulation of the SmallCap Digest or= representation on SmallCapNetwork.net. Likewise, this newsletter is owned= by TGR, LLC. To the degrees enumerated herein, this newsletter should no= t be regarded as an independent publication. Click Here to view our comp= ensation on every company we have ever covered, or visit the following web = address: http://www.smallcapdigest.net/compensation_disclosure.html for o= ur full compensation disclosure and http://www.smallcapdigest.net/short_ter= m_alerts.html for Trading Alerts compensation and disclosure. All statem= ents and expressions are the sole opinions of the editors and are subject = to change without notice. A profile, description, or other mention of a com= pany in the newsletter is neither an offer nor solicitation to buy or sell = any securities mentioned. While we believe all sources of information to b= e factual and reliable, in no way do we represent or guarantee the accuracy= thereof, nor the statements made herein. The editor, members of the edit= or's family, and/or entities with which the editor is affiliated, are forb= idden by company policy to own, buy, sell or otherwise trade stock for thei= r own benefit in the companies who appear in the publication. The profiles,= critiques, and other editorial content of the SmallCap Digest and SmallCap= Network.net 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 SECURITI= ES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DE= GREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COP= YRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN AN= Y WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF SMALLCAPNET= WORK.NET. We encourage our readers to invest carefully and read the inves= tor information available at the web sites of the Securities and Exchange = Commission ("SEC") at http://www.sec.gov and/or the National Association o= f Securities Dealers ("NASD") at http://www.nasd.com . We also strongly re= commend that you read the SEC advisory to investors concerning Internet Sto= ck 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. =09 --- You are currently subscribed to smallcapdigest as: andrew.h.lewis@enron.com To unsubscribe send a blank email to leave-smallcapdigest-871164Q@lyris.sma= llcapnetwork.net
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