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QXL.com soars on rating
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April 6, 2000: 3:53 p.m. ET
Analyst initiated coverage on European Web auction site at 'strong buy'
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NEW YORK (CNNfn) - The stock of European online auction site QXL.com soared Thursday after an analyst at SG Cowen initiated coverage on the company with a "strong buy" and set a lofty 24-month price target.
In late afternoon trading on Nasdaq, QXL.com's shares were up 38-5/32 at 60-1/2. The stock had traded as high as 117-3/8 earlier Thursday because of confusion over the price target SG Cowen analyst Thomas Bock put in an April 6 research report. Bock's report set a 24-month price target of $1,000 per ADS. However, that target is before a 3-for-1 stock split, effective Thursday, making his adjusted price target $333 per ADS.
SG Cowen Securities was a co-manager of an offering of QXL.com (QXLC: Research, Estimates) securities.
 In his research report, Bock said that he rates the company a "strong buy" because it "represents a unique combination of large potential market opportunity, defensibility, first-mover advantage, and attractive business model."
QXL.com conducts business-to-consumer and consumer-to-consumer auctions across seven European countries, making the site like a European version of the San Jose, Calif.-based auction firm eBay (EBAY: Research, Estimates). EBay lists more than four million new auctions, and 450,000 new items, every day on its site.
QXL.com competes with auctions run by eBay, Amazon.com, Yahoo!, and CMGI's uBid. Bock's report said that QXL should be able to maintain its dominant position in Europe despite this competition, "having established a significant lead in terms of understanding the inherent complexities of the varied markets and the necessity for a localized presence."
The size of the European auction market could justify a $25 billion market capitalization for QXL.com two years from now, which is the current market capitalization of eBay, Bock wrote.
The analyst set a high price target for the auction site's stock even though he forecasts that the company will lose money over the next three years, specifically a $4.43 per share loss in 2000, $3.09 in 2001, and $3.64 in 2002. 
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QXL.com
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