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It could almost be 1999 all over again. 121Media has loss-making operations, virtually no revenues, and a share price that is six times higher than it was a year ago. But the 40 per cent of its shares that are not owned by founders and employees are mainly held by institutions - they clearly believe that this will be more than another tech-boom horror story.
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In fact, they see the prospect of jam tomorrow. That jam centres on 121's technology, which purports to allow internet service providers (ISPs) to profit from providing anonymous information on their subscribers to advertisers. So, if 121 can sign up advertisers, websites and ISPs, it will make money by inserting advertising into websites that is tailored to the context and behaviour of the user.
Chief executive Kent Ertugrul is certainly confident. While not in a position to reveal contract announcements at present, he does say he's "optimistic that it is not a long-term thing".
| Ord price: 1,563p | Market value: £175m |
|---|---|
| Touch: 1,550-1,575p | 12-month High: 1,600p Low: 255p |
| Dividend yield: nil | PE ratio: na |
| Net asset value: 30¢ | Net cash: $3.8m |
| Year to | Turnover | Pre-tax | Earnings | Dividend per |
|---|---|---|---|---|
| 31 Dec | ($m) | profit ($m) | per share (¢) | share (¢) |
| 2005* | 5.21 | -3.5 | -47 | nil |
| 2006 | 1.27 | -11.5 | -112 | nil |
| % change | -76 | - | - | - |
The tightly held shares are now up 412 per cent on our buy tip at 305p, (12 May 2006). But without anything concrete to go on, we would advise taking profits at these inflated levels. Sell.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
