Perhaps we should redefine B2C. That is, call it: business-to-calamity. No
one likes B2C. In fact, it seems that the natural value of a B2C stock is in
the single digits (or penny stock levels).
Yet, the concept of e-commerce still has validity. So, there are likely some
nice bargains in the B2C space.
One that shows some promise is Tickets.com (TIXX).
Like its B2C brethren, Tickets.com has collapsed. A recent IPO, the stock
rose to a high of $32. Now, the stock is $5-1/16
Of course, the company’s name speaks for itself. Actually, online ticketing
is a fast-growing industry and it should continue to grow for many years. A
key reason is convenience. Why wait in line? Doesn’t it make more sense to
research online and press a button to make a purchase?
Interestingly enough, Tickets.com is not a pie-in-the sky Net company.
Rather, underlying the company is a brick-and-mortar operation. You see,
before Tickets.com went public, it merged into a traditional ticketing
business called Advantix. The company is a developer of proprietary software
systems for entertainment organizations (over 4,100).
Actually, Tickets.com is a roll-up of a variety of ticketing companies.
These include: Hill Arts and Entertainment Systems, Fantastix Ticket
Company, ProTix, TicketsLive, and Lasergate Systems.
But Tickets.com is building technologies internally. For example, the
company has struck a deal with ATM Tix that will turn Las Vegas ATMs into
virtual “call” windows, where consumers can pick-up their tickets.
Another interesting deal is with Talus Solutions. Both companies will join
to create demand driven pricing systems for the event ticketing industry.
Just as the airline industry has so-called “yield management,” so will the
event ticketing industry. Currently, the industry uses a fixed price
schedule.
In terms of the company’s financials, there is traction. Tickets.com had
$12.8 million in revenues in the fourth quarter, which was a 73 percent increase
from the same period a year before. Of this, $2.6 million were online
revenues. As for the losses, these were $18.1 million in the fourth quarter.
True, this sounds high. But, the company can afford the burn-rate. Besides
raising substantial sums from its IPO, Tickets.com has received strategic
investments from Excite@Home and Cox Media. At last count, Tickets.com had
$94 million in its bank account. The market capitalization is $290 million.
So, stripping out the cash, the ticketing business is being valued at about
$200 million. At this price, it could be very attractive to a portal that
wants to enter the ticketing business, say AOL or Yahoo!
Tickets.com also recently announced a partnership with Excite@Home where
they are the virtual ticket box office for “Excite Events,” an online venue
where users can find information about local and national events. They also
are the official ticket vendor for the 2002 Winter Olympic games and landed
a 10-year exclusive ticketing deal with the San Francisco Giants.
Tickets.com also has lots of international possibilities. Recent
international clients include Harbourfront Center in Canada, Sailsbury
Theater in London and Reserveerlijn (Netherlands).
In all, Tickets.com delivers 8 tickets per second within its network.
Forrester Research predicts online event ticketing market will grow from
$300 million in 1999 to nearly $3 billion in 2004. And Tickets.com will be
there with the infrastructure to ride this wave.
Is Tickets.com attractive to potential acquirers and investors at current levels? Discuss it here
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