Internet Stock Review
Online, Sunday 1/30/2000
Year 2000 Watch List
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Welcome
It was a battle to the final hour with this year's Watch List. We asked
ourselves if should we pursue the high flyers which may continue to fly (as did
the Watch List high flyers from 1998), or should we pursue fallen angels (of
which there are many too choose from) ? We decided to go the fallen angel route
(mostly) in addition to adding some financial (brokerage) stocks for the first
time. There were plenty of issues which went from $15 to $80 in a day and that
are now trading at $5.
As with last year there is no telling in advance which shall be winners and
which shall fall to the wayside. Last year there was no rhyme or reason, even in
hindsight as to what worked. CMGI (from 1998) ran from $14 to $106 and then
exploded in 1999. V-Source ran from $0.32 to $1.60 in 1998 and then exploded to
$15 in 1999. Who would've thought.
The well known EchoStar started the year heavily shorted (ruining some short
sellers careers) by moving ahead 720%. Comtex, which was totally unheard of (and
remains so) ran from $0.56 to as high as $5.00. Rare Medium (the old ICC
Technologies) which was totally unheard of ran from $4.50 to as high as $44, and
is now on the other hand, very very well known.
One thing we know for sure is we all did better by following our much often
mentioned rule of "letting your runners run and cutting your losers
short." This also means protecting your gains when if and when a stock
starts to come back down to earth. The peak gain in 1999's list was 200% whereas
the "up and down" was a much less inspiring 79%. (can you believe we
live in a day where 79% is "un-inspiring !")
We have again done our best to find some of the most obscure issues we could,
rather than saying "AOL" looks good. So with no further adieu...and
sorry to those who we kept up so late. As usual we recommend you all call the
company to get the "glossy brochure" to start your research.
Applix Inc. (Nasdaq: APLX). $14 5/8.
The story here is iCustomerCommunity.com. a web-based solution that allows
e-businesses to deliver a professional level of service to their entire
value-chain including customers and partners. Totally unknown, Applix has more
than 3,300 global customers, including more than half of the Fortune 500 and 72%
of the Fortune 50. Market Cap of $158 million, sales of $55 million and
profitable. Tell grandma. 508-870-0300
Profile:
http://biz.yahoo.com/p/a/aplx.html
Web site:
http://www.icustomercommunity.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=APLX
CareerBuilder.com (Nasdaq: CBDR). $7 1/4.
Fairly simple story, The CareerBuilder Network is comprised of 23 premier
Internet sites, including CareerBuilder.com. Career Builder hosts the sites and
provides and maintains the search engine and other technological features of the
sites, as well as providing customer support. A hot new issue that got cold,
then hot, then cold again. If you liked it at $20, you've got to love it at $7.
Nice site, we think they are a long term player. First Boston was the lead
underwriter, it and three others put buys on it in June. Where did they go ?
$170 million market cap, $12 million in sales, minuscule float. 703-709-1001
Profile:
http://biz.yahoo.com/p/c/cbdr.html
Web Site:
http://www.careerbuilder.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=CBDR
CheapTickets (Nasdaq: CTIX). $15 1/2.
Oh the pain. Down from $66 in the fall, we use the services of this Hawaiian
based ticket seller regularly. The company buys from airlines and resells to
consumers at significant discounts off published fares. Cheap Tickets has rights
to buy these fares under contracts from over 30 airline carriers, including
America West, American, Continental, Northwest, TWA and US Airways. For the nine
months ended 9/99, revenue totaled $273.3 million, up from $131 million. Market
cap of $370 million. Who says all internet companies lose money ?
Profile:
http://biz.yahoo.com/p/c/ctix.html
Web Site:
http://www.cheaptickets.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=CTIX
DYNAMIC MEDIA.COM (OTC: DIMG) (a)(b).
$2.00
Dynamic Media is a premier business development company for tomorrow's leading
multimedia technologies. Experienced in all phases of corporate development,
DYNAMIC MEDIA.COM is launching and growing a portfolio of companies focused on
future broadband Internet technologies...wireless, Internet commerce, and
multimedia. As a business development company (Net Incubator), it is the
intention to spin-off all subsidiary companies.
The current plan and prospectus filing by DIMG, within this quarter, should
result in providing significant liquidity and working capital to finance its
growing portfolio of Internet companies for long-term growth and should allow
the Company to meet NASDAQ listing requirements.
Profile:
http://www.quicken.com/investments/quotes/?defview=FULL&symbol=dimg
Web Site:
http://www.dimg.com/about/index.html
Chart:
http://www.quicken.com/investments/charts/?symbol=DIMG
Dynamicweb Enterprises (OTC: DWEB). $12
1/2 (a) (b).
Our only B2B e-commerce play, DWEB announced on December 2, 1999 that the
company had entered into a Definitive Merger Agreement with eB2B Commerce, Inc.
(eB2B.com), a privately held company also engaged in business-to-business
e-commerce. On December 20, 1999 eB2B and DynamicWeb announced that eB2B
Commerce, Inc. had completed a $33 million private financing. The private
financing was increased by eB2B from $15 million to $33 million. Leave it to us
to discover an unknown B2B play.
Recently announced that Best Buy will use EDIxchangeBuy to extend electronic
commerce to the Internet with Brick and Mortar vendors who are not EC capable to
it's long list of blue chip and Fortune 500 clients.
Profile:
http://biz.yahoo.com/p/d/dweb.ob.html
Web Site:
http://www.dynamicweb.com/
http://www.eb2b.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=DWEB
eFax. (Nasdaq: EFAX). $7 1/2.
The Company's flagship product is its free fax-to-email service which has
attracted more than 1 million subscribers. With a $97 million market cap, that
values each subscriber at $97. Been around for years, became a "born
again" internet last winter and ran to $33, only to give it all back. Visit
the site. Try it you'll like. We did.
Profile:
http://biz.yahoo.com/p/e/efax.html
Web Site:
http://www.efax.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=EFAX
Friedman Billings (NYSE: FBR). $9.
Old line firm that launched online investment bank doing 24 deals, launched a
venture capital arm funding 23 deals and completed 100 investment banking deals
all in 1999. If it doesn't get the attention it deserves on Wall Street, it will
in all likelihood be taken over by some soon to be launched e-Investment Bank
run by a couple of 20 year olds. 703-312-9500
Profile:
http://biz.yahoo.com/p/f/fbr.html
Web Site:
http://www.fbr.com/
http://www.quicken.com/investments/charts/?symbol=FBR
FutureLink (Nasdaq: FTRL). $20 1/4.
A recent graduate from the OTC Bulletin Board, FutureLink calls itself the
"Computer Utility Company." Technology used by the company allows what
would normally be desktop applications, to run on a server for a small monthly
fee. Their core philosophy is to deliver any application, to anyone, anywhere
with the speed and simplicity of a utility. Not cheap with a market cap
approaching $1 billion, though the upside potential is enormous. Backed by
Commonwealth Associates and Pequot Capital Management. 949-837-8252.
Profile:
http://biz.yahoo.com/p/f/ftrl.html
Web Site:
http://www.futurelink.net/
Chart:
http://finance.yahoo.com/q?s=ftrl&d=1y
FVC Corp. (Nasdaq: FVCX). $12 3/4.
FVC.com, Inc. develops, manufactures and markets video networking systems for
use in business, government, and educational environments. This pretty much says
it all and we believe it's only a matter of time before this company garners
Wall Street's attention ahead of the broad adoption of Broadband. The market for
video services is expected to grow from $6 billion to $23 billion in year 2003
and FVC.com is ahead of the curve. $213 million market cap versus $45 million in
sales. 408-567-7200.
Profile:
http://biz.yahoo.com/p/f/fvcx.html
Web Site:
http://www.fvc.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=FVCX
GetThere.com (Nasdaq: GTHR). $30.
It's been a wild two months since GetThere went public on November 22nd at $16
with DLJ. The stock opened at $25, traded as high as $52 and now sits at
$30. Our third "travel play," With Navigant (FLYR) being the first,
GetThere is a B2B travel play owned 28% by United Airline and 15% by American
Express. 650-752-1500.
Profile:
http://biz.yahoo.com/p/g/gthr.html
Web Site:
http://www.getthere.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=GTHR
Institutional Equity Holdings. (OTC:
IEQC). $0.75
Our penny stock play for the year, IEH was formerly called Redstone Securities
(Stock Brokerage). The company bought an old shell called EuroMed which went
public in 1996. Found this via a board appointment announcement of its CFO to
StreamMedia (Nasdaq: SMILU) which they brought public. CFO Robert Shuey also
serves as a member of the Board of Directors of Autobond Corporation,
Transnational Financial Corporation, Lancer Corporation, and Rampart Capital
Corporation.
In 1998, the Company had two offices in the state of New York and one office in
the state of Florida. In 1999, the Company added offices in Dallas and Austin,
Texas and West Patterson, New Jersey. For the nine months ended 9/99, revenues
rose 84% to $6.1 million. $1.9 million market cap, 800,000 shares in the float.
Did not trade Friday. Oh boy. 214-692-3544.
Profile:
http://biz.yahoo.com/p/i/ieqc.ob.html
SEC Filings:
http://www.sec.gov/Archives/edgar/data/852447/0001018375-99-000052-index.html
Chart:
http://www.quicken.com/investments/charts/?symbol=IEQC
Historical Quote:
http://chart.yahoo.com/d?s=ieqc.ob
Laidlaw Global. (OTC: LAIG) $9 3/4.
Laidlaw is our third financial firm added to this year's Watch List. Laidlaw
Global Corporation is a global financial services firm that operates in four
activities: investment banking, sales & trading, asset management and online
trading. It has two subsidiaries that operate in all three activities: Laidlaw
Holdings, Inc. which includes Laidlaw Global Securities, Inc., Howe &
Rusling, Inc., and Westminster Securities Corporation a NYSE member firm. Has
offices in Miami, New York, Paris, Geneva, Athens, Nassau, Barcelona, Hong Kong
and Singapore.
Recently launched Globalshare.com. With a single Globeshare.com trading account,
investors in the U.S. and around the world can buy and sell stocks in overseas
markets, evaluate original local research, chat at any time with a live broker,
and receive continuously updated quotes, economic news and earnings estimates by
Zack's Investment Services, Comtex, Barra and Bridge. Trades can be placed
online 24 hours a day, Monday through Friday. Sales for nine months ending 9/30
were $20.3 million versus $14.8 million.
212-376-8800.
Web Site:
http://www.laidlawglobal.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=LAIG
MediaX Corp (OTC: MXMX). $2 1/2. (a)
(c)
We would describe this company as a leading edge developer of web sites which
are designed to sell merchandise that relates to some of the nation's (world's)
top artists and celebrities. It takes about five seconds at the Rod Stewart
Live.com web site and the sites they created for Paul McCartney, Faith Hill, EYC
and Divine to see that the tech team behind this company -- is without any
question -- one of the best in the country.
The game plan is fairly simple and straight forward. First, find a hugely
popular artist (music, film, etc.) and create a web site that will draw huge
crowds by virtue of that star or celebrities popularity. Next, keep the crowds
there by loading the site with contests, chat, interviews, sound clips and
photos. $14 million market cap. 310-815-8002.
Profile:
http://biz.yahoo.com/p/m/mxmx.ob.html
Web Site:
http://www.mediax.com
http://www.rodstewartlive.com
http://www.amuznet.com
Chart:
http://www.quicken.com/investments/charts/?symbol=MXMX
Modern Records (OTC: MDNR). $0.75. (a)
(c)
This is the world re-known Jackson family. Yes, that Jackson family. They will
be doing a reunion album. It will be promoted on sold over the Internet. They
just signed Tiffany (who sold 14 million records). It's selling under a dollar.
What more does one need to know.
Profile:
http://www.modernrecords.com/compbio.html
Web Site:
http://www.modernrecords.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=MDNR
MotherNature.com (Nasdaq: MTHR): $8
1/8.
MotherNature.com is a leading online retail store and information source for
natural and healthy living products. They offer approximately 13,000 vitamins,
supplements and minerals, or VSM, and other natural and healthy living products.
In exchange for 6% of their stock, they have access to the 25 million customer
Rodale database which includes Prevention magazine, Men's Health, Back Packer
and Runner's World. IPO was priced at $13, closed at $10.31 with Bear Stearns
leading and Wit Capital and Hambrecht & Quist co-managing. $122 million
market cap. Hambrecht issued buy early January with $15 price target.
978-929-2000.
Profile:
http://biz.yahoo.com/p/m/mthr.html
Web Site:
http://www.mothernature.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=MTHR
Netbank (Nasdaq: NTBK). $17 1/4.
Currently out of favor on Wall Street, NetBank reported total assets more than
tripled in 1999, rising to $1.3 billion from $388 million, making it the
fourth-largest bank in Georgia on January 24th. Customer count grew to 66,000
from 17,400 during 1999. Down from a high $83 last summer, NetBank is our
favorite comeback play. Our second Watch List bank, following USABancshares,
which has a $48 million market cap. 770-343-6006.
Profile:
http://biz.yahoo.com/p/n/ntbk.html
Web Site:
http://www.netbank.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=NTBK
NetZero (Nasdaq: NZRO). $35.
One of the few Internet (if not only) companies hitting new highs, we are firm
believers in free Internet access and hence NetZero with it's 3 million
subscribers. Expect to see many more agreements signed with advertisers similar
the General Motors on January 13th which could be valued as much as $68 million
over the next four years.
Profile:
http://biz.yahoo.com/p/n/nzro.html
Web Site:
http://www.netzero.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=NZRO
PictureTel (Nasdaq: PCTL) $7.
On December 6th, PictureTel won product of the year in multimedia conferencing
by Internet telephony magazine. This multimedia web application synchronizes
video, PowerPoint slides and interactive chat for live and on-demand broadcasts
in an integrated web-browser format. Sales for the trailing twelve months were
$339 million. 978-292-5000.
Profile:
http://biz.yahoo.com/p/p/pctl.html
Web Site:
http://www.picturetel.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=PCTL
US Search.com (Nasdaq:SRCH). $9 3/4.
US Search has one of the highest gross margins (62%) of any of the Internet
related issues we follow. The company's services include individual locator,
individual public record report, nationwide civil court record search and other
related public record search services. Net revenues increased to approximately
$13.4 million, or 94%, for the nine months ended September 30, 1999 from
approximately $6.9 million for the nine months ended September 30, 1998. Gross
profit increased to approximately $8.0 million for the nine months ended
September 30, 1999 from approximately $4.2 million for the nine months ended
September 30, 1998. 310-553-7000.
Profile:
http://biz.yahoo.com/p/s/srch.html
Web Site:
http://www.1800ussearch.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=SRCH
theGlobe.com (Nasdaq: TGLO) $8.
If you liked it at $42 3/4, you have to love it at $8. With 2.5 million
subscribers and a market cap of $211 million, Wall Street is valuing each
subscriber at only $84 each. theglobe.com provides users with news, business
information, real time stock quotes, weather, movie and music reviews,
multi-player gaming, personals and provides various free services, including
home page building, discussion forums, chat rooms, e-mail and electronic
commerce. We believe it is only a matter of time before the company learns how
to monetize this huge subscriber base or begins to offer free internet access in
addition to its current offerings. 212-894-3600.
Profile:
http://biz.yahoo.com/p/t/tglo.html
Web Site:
http://www.theglobe.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=TGLO
iTurf.com (Nasdaq: TURF). $13.
Another battered youth portal, iTurf has traded down from a high of $66 last
summer when it went public in an underwriting led by Alex Brown, JP Morgan and
Hambrecht & Quist. On January 12th, the company reported having passed the
3.25 million mark for e-mail registrations across the iTurf network. Network:
gURL.com, dELiAs.cOm, iTurf.com, OnTap.com, tsisoccer.com, droog.com,
discountdomain.com, StorybookHeirlooms.com and dotdotdash.com. We believe it is
only a matter of time before the company learns how to monetize this huge
subscriber base or begins to offer free internet access in addition to its
current offerings. 212-742-1640.
Profile:
http://biz.yahoo.com/p/t/turf.html
Web Site:
http://www.iturf.com/preview/slider/index.htm
Chart:
http://www.quicken.com/investments/charts/?symbol=TURF
USOL Holdings (Nasdaq: USOL) $10 1/2.
Approaching new highs, U.S Online, Inc. is a provider of integrated
telecommunications and entertainment services to residents of multi-family
apartment and condominium complexes, including local and long distance
telephone, cable TV, and high-speed Internet access. Little known division
TheResidentClub.com, is the largest provider of benefits to Multiple-Dwelling
Units (MDU's) in North America with more than 500,000 residents and 2,700
communities in 37 states. TRC was formed in 1999 with the acquisition of the
Resident's Advantage program from General Motors Acceptance Corporation who
remains a shareholder along with AGL Capital, Duetsche Bank and Banque Paribas.
Market cap of a mere $72 million. 503-306-4444.
Profile:
http://biz.yahoo.com/p/u/usol.html
Web Site:
http://www.usolcomm.com/
Chart:
http://www.quicken.com/investments/charts/?symbol=USOL
X-Stream Network (OTC: XSNI) $2 1/4.
Did we mention we love free Internet Access. Did we mention we love undiscovered
Internet plays. X-Stream Networks is both and with an International flavor.
There in also lies the problem in that we don't even know how many shares are
outstanding. Launched in the UK on March 8, 1998, The X-Stream Network is the
UK's first 100% FREE Internet access service, with over 600,000 registered
subscribers worldwide, and now offers FREE Internet access in Sweden, Norway,
Denmark and The Netherlands. Recently received a $5 million investment for 10%
of the company from LibertySurf whose principal shareholders are Europ@web, the
Internet investment vehicle of the Arnault Group, and KingFisher, the UK retail
group. Start digging.
Profile:
http://finance.yahoo.com/q?s=XSNI.OB&d=t
Web Site:
http://www.x-stream.com/
Chart:
http://www.quicken.com/investments/quotes/?defview=FULL&symbol=xsni
Well that's 19 leaving one to be decided
over (and to be announced) later during the week. Good hunting.
(a) Client Company. (b) Summer Watch List Company. (c) Internet/Music Watch
List.
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Important Distinction #1. First and foremost the Watch List is just that. A
watch list. It is not a buy list. Meaning that there will be no buys or sales
issued by the Internet Stock Review. If this was a buy list, you can rest
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speed ahead and damn the torpedoes to make everyone know just how brilliant
we were when we issued the list. Interviews on CNBC, articles in Barron's and
accolades in the Wall Street Journal--the only thing we love more than
money is praise and fame--but it just ain't gonna happen.
What the Internet Stock Review is...is a "news aggregation service".
With the
advent of the Internet, everyone knows what that term means. What it means to
us is the following: We will follow the progress of as many Internet related
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minuscule) and advise you of when they have reported news. As a subscriber to
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entire industry right from one single e-mail. We will report who released
news and point (with hyper links) to where the news can be found. We try to
use Yahoo! Finance as extensively as possible so we don't send you all over
cyberspace. We love Yahoo, you will too. Any decisions as to buy or sell
however, are strictly up to you.
Which leads to important distinction #2. How do we get paid. The Internet
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As such, is important to note that anytime we say anything about a company,
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would like them to be a client of our parent company. In a nut shell, you can
throw out any thoughts of us being even a little bit impartial. It just ain't
gonna
happen. We love everyone.
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