Wednesday, March 31, 2010

CitySide Tickets, Inc. (CIST.PK) Strategically Building a Nationwide Enterprise

CitySide Tickets, a new and rapidly growing member of the ticket resale industry, is unique in its relationship to the marketplace, which has made it an unusual ground floor opportunity for investors.

Perhaps it all goes back to the way it got started. CitySide wasn’t put together by a bunch of boardroom number crunchers, a way to prop up one side of a balance sheet. Like so many great startups, CitySide was started by a young forward thinking unshackled visionary who saw and filled a grass-roots need.

Michael DeAmicis, now the company’s CEO, started out as a teenager selling extra tickets to Boston Red Sox games right outside of Fenway Park. He realized that there was a vast opportunity in ticket resales that would never be met on the sidewalks. He started putting together a business strategy and began operating out of his home. As his approach eventually became CitySide Tickets, he upgraded to a storefront, mere steps away from where he used to sell tickets on the streets by Fenway. It became clear that one of the cornerstones of the company’s success was this storefront location, which is still responsible for generating roughly half of CitySide’s business through simple walk-up traffic.

But CitySide soon began to look beyond its modest beginnings and the local Boston baseball market. CitySide rapidly became a New England resource for major concert events, as well as a growing range of sporting events. Today the company offers Bon Jovi, Elton John & Billy Joel, and Mariah Carey, right alongside Major League Baseball, NBA Basketball, NFL Football, NHL Hockey, National Finals Rodeo, NASCAR Racing, and even Ultimate Fighting Championship events and Monster Jam.

As the company went electronic through CitySideTickets.com, they grabbed market share by adding a feature where visitors can sell their own tickets, as well as buy tickets. The company is now gaining momentum around the country by pursuing the acquisition of smaller ticket sellers, such as the recent letter of intent signed to acquire StadiumSeats.com which CitySide hopes to groom into a competitor to current industry giant StubHub.

But another factor that has worked in the company’s favor is the fact that it is publicly traded, allowing it to absorb slumps in the economy better than many. In addition, when CitySide acquires a smaller operation, it can offset purchase costs through the offering of CitySide stock, allowing it to use its capital to continue building high value ticket inventory and attracting traffic.

It all represents a combination of ingredients that bodes well for CitySide as it continues to build from the East Coast to a national presence.

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