Beaten Down Stocks
Priceline (PCLN)is now approximately $3 a share and the company is now worth approximately $540 million as compared to billions of dollars less than a year ago. According to the latest financials, the company has no debt, $138 million in cash. The company has had revenues over the past nine months of over a billion dollars, but has had a loss of over $224 million for the period.
Some of the problems the company is having has been satisfying customers and many also question its business model. The company has received many complaints from consumers and very negative television press about its problems.
The company also has been laying off much of its workforce and some of the top executives have left. They have lost their chief financial officer, and some others.
Some question whether the business model will work. As a result, now maybe a time to get in if you are willing to take a risk. With all of the recent employees, the company may not be suitable for investment. With the recent downturn in stock price, the company will have to most likely manage to find a way to make a profit because venture capitalist may stop funding the company due to all of the recent activity.
The value of this company right now is similar to Pricelines motto, “name your price.” No one knows for sure the certainty of the company.
Another company which has really gone down in price is COVAD (COVD). The company is the largest non-bell high speed DSL provider in the US. DSL is high speed Internet access that is done over regular telephone wires. The company has been growing like crazy and losing money just as fast. The CEO recently quit and the stock has decreased further.
Unlike, Priceline, the demand for DSL is strong. DSL is expected to be one of the most widely available high-speed Internet access of choice in the near future. Unlike cable, however, DSL is still limited by distance of usually 12,000 feet from the telephone companies central office.
SBC Communications is experimenting with running high speed fiber optic lines from their central offices to extend this range. The company has also chosen COVAD to provide their DSL service instead of doing it themselves and is trying to get approval to invest in the company.
The company may also be a takeover target for many telephone companies who want to gain more share in the DSL market.
The recent revenues for the past 9months, revenues have reached $166 million and losses have totaled $428 million. The company now has approximately $1billion in cash, the company has a debt/equity ratio of 1.02 or over 100% and has a market value of $875 million.
PSINet is another really beaten down stock. Like COVAD, it has had big losses. For the nine months ended 9/00, revenues totalled $843.2 million, up from $369.3 million. Net loss from continuing operations applicable to Common totaled $1.02 billion, up from $210.4 million. Revenues reflect acquisitions and internal growth. Higher loss reflects impairment and restructuring charges.
The company provides Internet access and webhosting services to individuals and companies. It is considered to be one of the largest webhosting companies in the US.
The company has a debt/equity ration of approximately 1.3, cash of 1.5 billion dollars and is selling at 403 million dollars. The stock price is down to approximately $2 a share from its high of about $60.
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