Coolsavings.com has a dot-com in its name, but now that the company has come out of its post-IPO quiet period, CEO Steven Golden is going to make sure it doesn't get valued as one.
Shares in the company were up 1/32 to 6 1/32 Thursday, having fallen since the icy reception given to its IPO on May 18. Shares managed to totter up to a high of 7 1/8 after debuting at $7 a share.
The company offers users a "lifetime of savings" if they register with the site, which counted about 7 million registrations as of May. Consumers can collect coupons and points by becoming a member; in return, Coolsavings.com gets demographic information to help its advertisers design targeted marketing campaigns and promotions. Founded by Golden in 1994, the company was originally the Interactive Coupon Marketing Group.
"This company has a business model. We're on the path to profitability," Golden said. First Call has the company turning a profit by the fourth quarter of 2001, based on the estimate of the lone analyst that covers the company.
Not only is Golden comfortable with this, and the estimated loss of 27 cents a share for the company's upcoming second quarter, he said the numbers are modest, and the company is working to reach profitability sooner. "We wanted the estimates to be conservative, get some wind in our sails and let the numbers get revised up."
Chase H&Q, the company's lead underwriter, initiated coverage of the stock with a "buy" rating Wednesday, and Thomas Weisel, the deal's co-manager, rated it a "strong buy" Tuesday.
Golden said the company went public in order to take advantage of the public currency that may allow it to acquire competitors, and is looking forward to some deals that can provide the site with more content.
He believes the stock will go up now that the company has come out of 5 months of silence. Not only has the company not been able to announce new product developments, like its points system, it has also had to suffer through press citations of it as an exemplar of the money-losing company trying to squeeze through a falling IPO window.
"We took a lot of shots," he said. "You sit on the sidelines as stories come out, true or not true, and you have to bite your tongue."
For fiscal 1999, Golden said 50 percent of the company's revenue came from dot coms, 25 percent came from clicks and mortar companies, and 25 percent came from strictly bricks and mortar businesses. He said he sees the percentage of revenue from bricks and mortar companies increasing, especially since the company's partnership with First Data, which will allow it to credit coupons directly to credit cards.
"One-to one marketing is here -- the Holy Grail marketing has been looking for," Golden said, emphasizing the precision and complexity of the statistical models created in his company's data warehouse.
The company's competitors include Cybergold (Nasdaq: CGLD), e-centives , and Lifeminders.com (Nasdaq: LFMN), which also use demographic information provided by users to target advertiser.
"Why would anyone look at a one-horse model like Lifeminders that delivers a category newsletter," Golden said, emphasizing that Coolsavings.com has multiple revenue streams, and a new deal with Motorola (NYSE: MOT) to deliver its content on wireless devices.