To OTC Journal Members: 
 

Still 50% Undervalued Today

Yes, it's still shameless to put up a picture of this beautiful woman in a skin tight dress to get your attention. After all, most guys want to meet her, and most woman want to look like her in this dress.

The name of this designer line is Stretta Apparel, and I count about 50 retailers around the globe carrying their product. While many are small boutiques, Nordstrom is included on their customer list, and the line is available in N. America, the Caribbean, Hawaii, Europe, Asia, and Australia. It might not be a household name to us stock market nuts, but it's a hot line in the designer world.

As I pointed out yesterday, this dress (the Charlotte) sells for $498 on the Stretta web site. You can find it online and on sale at a few outlets for $262.

However, if you are a member at Luxeyard (www.luxeyard.com), you can purchase this dress for the lowest price you will find it anywhere- $228- as long as you buy it by Friday.

American consumers have an insatiable appetite for luxury goods. Americans also have a keen eye for a bargain, and are willing to act when motivated by a deep discount combined with a limited time frame. The explosion of highly successful flash sites proves the point.

Moreover, the Flash Sale Site space is the beneficiary of a gold rush like mentality of Silicon Valley venture capital money, and the funding is just pouring into this new generation retailer segment.

As of right now, there are about 500,00 registered users on the Luxeyard site.

Luxeyard (OTC BB: LUXR) is one of the newer kids on the block, but is gaining market share and popularity very rapidly.

As I stated yesterday, based on the valuations awarded to these companies as sophisticated VCs pour money into the space, LUXR should be worth $100 million today. Instead, at about $.80 with 65 million shares I&O, the market is valuing the company at $52 million.

Here are the facts- plow on...........

$192 Per Registered User

VCs have been pouring money into the new breed of Flash Sale sites. Here's a couple of recent examples:

• iDeeli raised $70 million from Kodiak Ventures, Constellation Ventures, and StarVest
• Fab.com received $40 million from Andressen Horowitz as a start up
• Zuliiy received $43 million from Meritech Capital Partners
• One Kings Lane received $23 million from Kleiner Perkins and $40 million from Tiger Global

Based on the valuations these sophisticated investors paid, one can easily argue LUXR is 50% undervalued.

This table shows a list of Flash Sale sites that have received financings from sophisticated Venture Capital investors in the last 18 months.

When one looks at the valuations of the fundings, and compares those valuations to the amount awarded per registered user at the time of investment, the valuations have come in at $197 per registered user.

Fab.com is probably the best comparison to LUXR as the user base is at the 1 million level.

LUXR, after many months of development, officially opened for business on January 24. According to a recent press release, LUXR has already eclipsed the 400,000 registered member mark, and at the present pace, should reach 1 million members by the end of June.

Fab.com, with its 1 million members, was financed at a $200 million valuation.

If we're lucky enough to have LUXR trade to the $200 million mark by the end of June, the stock would hit the $3.07 level.

That would represent a 315% gain above the current trading range of the stock.

I suspect millions of investors will be learning about this stock over the coming weeks and months. The action has started already. I have a lot more data on both the sector and this company in particular, but I can save it for some follow ups next week.

There's lots more for you to learn about the TrendSetter Celebrities endorsing the products- led by world famous designer Daniella Clark (married to the guitarist from Guns 'N Roses) who was responsible for designing the current low cut, high priced jeans. Their management team includes top executives formerly with names like Pottery Barn, Williams Sonoma, Ray Ban, Nordstrom, Hautelook, Calvin Klein, etc. More on that as well.

As you can see from this chart, LUXR has started to develop a following since early March. As the registered users piled in and the company started marketing products, the stock started to climb.

This is a very bullish and healthy chart. The stock was $.50 six weeks ago. It then made a nice leg up, making a new high at $.75. After a 50% move, the stock pulled back to a normal retracement of $.60, traded sideways for a few days, then headed on to a second new high. The average daily volume is now about 160,000 shares and climbing.

To simplify the picture, the stock is establishing a pattern of higher lows and higher highs.

Note there's presently a short term pullback going on, which is why I was anxious to share this idea now. I wanted you to be able to take advantage of the brief weakness if you're so inclined.

My first threshold is over $1 for this stock, and if the current pattern continues, it might be met on the next leg up. Longer term I believe there's a chance the stock could find the $3 mark over the next several months if the registered users keep piling in.

Again, I remind you I'm a shareholder of both free trading and restricted shares, all acquired with my own hard earned money.

I would be an investor today in the $.80 range where it closed. Use $.60 as your suggested stop loss- it shouldn't drop below the previous pull back level if the pattern is going to repeat itself.

The short term upside target over the next 1 to 2 weeks is $1, with a six month target of $3.  

You should go to the web site and become a registered user. Simply visit www.luxeyard.com and sign up.

Also- there's a special event coming up. Next Monday, when I co-host the BigBizShow, I will have Amir Mireskandari, the Chairman of the company, live in the studio for an interview and update.

He will be on at 12:30 Eastern, 9:30 Pacific Time- that's on the internet streamed version.

Simply go to www.BIGBIZSHOW.com and click on the "Watch Us Live" link to view the interview on your computer.

We might have a gigantic winner with this one.

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