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To IO Report Members:
Welcome to the 21st Century. Consider people's lifestyle at the turn of the last century as opposed to today. Now try to visualize life at the end of this century. It boggles the mind.
We have a lot of exciting programs planned for Year 2,000. Here are two upcoming events you will want to put on your calendar:
We believe that the current correction in the Technology Sector is a new phenomenon that we have never seen before. For lack of a better description, we will call it an "Inverted January Effect".
The term January Effect refers to the annual year end sell off in poorly performing securities. Investors tend to sell their losers at the end of the year for tax purposes. Due to the seasonal absence of buyers, many of these securities become "Oversold", and tend to bounce back once the year end selling pressure is off and buyers resurface. This is known as the January Effect.
We believe that there is a new twist on this old theme occurring this year. We had a meteoric rise in the value of technology stocks in the 4th Quarter of 1999. The NASDAQ Index was up 85% in 1999, setting a new record for any index in the history of stocks. The majority of those gains came after October 1st.
Fund managers and retail investors were sitting on huge profits at the end of the year. No one wanted to sell due to tax considerations. Retail investors that waited until after the first of the year to take profits delayed the tax consequences until April of 2001, buying themselves 12 months on tax liabilities.
Fund managers enjoyed outstanding performance statistics on their funds at year end. Selling pressure from fund managers would have inhibited that performance and created tax problems for their investors.
We believe that this "Inverted January Effect" resulted in enormous pent up demand to take profits right after the first of the year, and the markets sold off in a short term blood bath this week.
Our guess is that most of the damage has been done, and there are now some lower risk entry levels for both small and large cap stocks. A more ominous stumbling block for the markets is rising interest rates. This will have the effect of cooling off the market until there is a perception that interest rate increases have come to an end.
All in all, we believe it will be a great year for both small and large cap stocks.
PawnBroker.Com (OTC BB: PBRR) Update
Pawnbroker is our most current profile. We released it on December 10th when the stock closed at $7. Within two days the stock traded as high as $9, but drifted back down to the $7 range during the Christmas Holiday season.
With our previous profile Blue Zone (OTC BB: BLZN) trading in the $8 range (a 60% increase from its profiled price), and Infowave (TSE: IW) screaming up the charts on huge volume (up nearly 10 points in the last week), we thought an update on Pawnbroker might be appropriate as the market is continuing to provide a favorable entry level for this stock.
If you didn't have a chance to read the original profile, simply click here and you will be taken directly to it.
We caught up with the President of the Company, Neil McElwee, today in between flights and had a chance to ask some questions.
Here is what we learned. The current target date for a full commercial launch of the Pawnbroker.com site is now mid March. They are building a framework that will allow the site to handle up to 100,000 transactions per minute. They don't want to make the same mistakes that EBay (NASDAQ: EBAY) made in their original back end structure.
When they launch the site there will be 200,000 items for sale from pawnshops nationwide. Over the next three weeks the company will be hosting demos in most of the major US Cities for pawnbrokers. Pawnshops are signing up at a rapid rate, and that is expected to accelerate.
They are including an inventory management system in the Pawnshop Package that will automatically integrate inventory control systems so that items which have been sold do not appear on the site. They are also building out a private Intranet for Pawnbroker to Pawnbroker transactions and inventory management system which will have a transaction based revenue model.
In two weeks will be attending the demo in San Diego, and we will get our first look at the functionality of the system and the site.
Mr. McElwee would not share any information with us about the progress of the relationship with Jeffries & Co., their Wall Street Investment Banking Firm. However he did tell us that they only need to add a Board member to meet all the qualifications for a NASDAQ listing, and he implied that they would be applying soon.
We believe that this company will
receive an unprecedented amount of press coverage when the unveil their
site. Baring any market condition disasters, we don't believe that
the stock will be trading any where near these levels when they launch.
Remember, invest wisely and with caution. It's your hard earned money, so be careful. If there is no major news from any of our covered companies our next newsletter will be out Wednesday with the first Private Placement we have ever featured.
Disclaimer: The IOReport.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 IO Report, has not been paid any fee of any kind for representing PawnBroker.com, and has no formal relationship with the company. The IOReport.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 IOReport.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
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