Awards In Store At Netcentives?by
One distressed money manager moaned: "It was brutal." That was after Netcentives (NCNT) cascaded all the way down from 80 in December to 9 on Apr. 24. The stock has since inched up to 14 1/4. Chairman and CEO West Shell says he is astonished at the pummeling, considering the company's $100 million in cash and liquid assets.
Another thing that makes the drop surprising is that Shell has recently signed up several big customers and partners that have purchased equity stakes in the company. Netcentives reported first-quarter results that exceeded estimates on the top and bottom line, says Timothy Klein, an analyst at U.S. Bancorp Piper Jaffray, who rates the stock a "strong buy."
Netcentives provides Web technology that lets companies and e-commerce sites offer "loyalty rewards" to employees and customers, such as gift coupons. America Online, American Express, Citigroup, and CMGI use Netcentives' reward systems. Each of the four companies has also acquired a nearly 5% stake in Netcentives. Netcentives has also taken a 4.9% stake in CMGI. Shell expects business from the four partners alone to generate $100 million in sales in three years. Shell notes that the number of people who have benefited from Netcentives rewards and marketing has jumped from 5 million to 40 million.
U.S. Bancorp's Klein estimates revenues to jump to $31 million in 2000 and to $85 million in 2001, up from 1999's $7.8 million. He expects the company to be in the black in 2002.