Though SportsLine.com's stock has dropped in the past
four months, from $82 in December to $11.63 on Monday,
SportsLine CEO Mike Levy "painted a positive portrait
Tuesday of a company with soaring revenue and declining
losses," according to John Dorschner of the MIAMI HERALD.
For the first quarter of 2000, SportsLine "reported a pro
forma net loss" of $15M, or $0.58 per share, which is
"considerably better" than the $0.76 a share loss that
analysts had been predicting to First Call. Levy told
analysts, "Our business model is clearly working. We have
more than $170 million in cash, a disciplined and highly
effective strategy for growth ... and we are on the cusp of
achieving positive cash flow." Friedman Billings senior
analyst Rob Martin said after SportsLine's earnings report:
"They were ahead of our expectations -- better on the
revenue side, better on the cost side. Traffic was [a]
little below expectation, but that could have been because
of seasonal fluctuation. The bottom line is that they've
established themselves as one of two top sports sites, and
advertising is now going to them by default." Investors
"responded enthusiastically" to the earnings report, sending
shares up 32% to close at $15.31. SportsLine's first
quarter revenue was $22.7M -- double the $11M it received in
the first quarter of '99. Levy: "We're well on our way to
being cash-flow positive in our U.S. operations by the end
of this year" (MIAMI HERALD, 4/19).
LEVY SAYS MODEL IS STRONG: Levy added that the
company's "huge cash supply means that SportsLine isn't in
danger of running out of money, as appears to be the case
with many other dot-coms." While "about" 80% of
SportsLine's revenues come from advertising, Levy said that
75% of that was "from non-dot-coms, particularly large
sports advertisers like Budweiser, plus Buick, Intel,
Microsoft, Nortel and RCA." Levy believes SportsLine's
stock has fallen recently because it had been "unfairly
grouped with a pack of dogs." Levy: "The consumer content
companies on the Internet have fallen into disfavor with
institutional investors. Many have business models that
aren't that great. They never should have gone public. We
have a very solid business model" (MIAMI HERALD, 4/19).
