.dot com investment...?
Discussion
no, you're not back in 1998!
I've just been offered the opportunity to invest in a .dot com, selling music CDs, DVDs etc. The site(s) are supported by a very famous brand name, are profitable and have been in business for many years (by .dot com standards). Profit is forecast to increase by around 20% pa (which I reckon is conservative)
The way I see it:
1. Tech is oversold (everyone still smarting from the internet meltdown and now investing in property etc.)
2. Those companies that survived the bubble are likely to be very successful (Google, ebay, amazon etc), since all the overhyped, under performing companies are now bankrupt (but the online market is booming)
3. This company has very experienced management, is profitable and has very good customer retention.
4. climbing levels of M&A in tech as the market seeks to consolidate could lead to a fairly rapid exit.
what do people think? is it worth a punt (say 20k or so)?
UV
I've just been offered the opportunity to invest in a .dot com, selling music CDs, DVDs etc. The site(s) are supported by a very famous brand name, are profitable and have been in business for many years (by .dot com standards). Profit is forecast to increase by around 20% pa (which I reckon is conservative)
The way I see it:
1. Tech is oversold (everyone still smarting from the internet meltdown and now investing in property etc.)
2. Those companies that survived the bubble are likely to be very successful (Google, ebay, amazon etc), since all the overhyped, under performing companies are now bankrupt (but the online market is booming)
3. This company has very experienced management, is profitable and has very good customer retention.
4. climbing levels of M&A in tech as the market seeks to consolidate could lead to a fairly rapid exit.
what do people think? is it worth a punt (say 20k or so)?
UV
justinp1 said:
My concern at the moment from working in the music industry is the very fast market shift away from CDs and DVDs. If you read some of the Apple figures for songs sold through itunes and now films and tv programmes sold there too that the market is going through the roof exponentially with Apples vertical integration tactics and also now with the iPhone due out in months which does everything an iPod does.
The problem is that although the company may be successful at the moment, they have a chunk of an ever dwindling market. Apple really have the market sown up for the next generation - ten years or so until the next revelation comes out. Similarly the big record companies are struggling to break even as the industry has changed so much so quickly. If you have a dwindling market then the only ones able to make a profit will be the big players already, it would be better to exploit a new niche.
If you want to be ahead of the game I would look into investing into a company which sells blu-ray and HD DVD discs. They will be the new standard in 3-5 years as by then HD screens will be the norm too. The PS3 coming out in a few months will also mean that the number of blu-ray players in the UK will increase 100 fold overnight - with very little retail support.
Good point... in fact the viability of any physical transmission of content is only good until the generally available bandwidth renders it obsolete. I wonder what the lifespan of HD DVD / Blu Ray will be relative to CDs, as I could well foresee streaming and on-demand content provision superseding HD in physical form very quickly.
Time for a rethink....
UV
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