Internet IPOs Run From Lows
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Anybody who would have bought an Internet IPO in this table shown at the low would be up at least 13%. Some would have enjoyed as much as a 303% pop from the depths.
As a group these stocks gained a blended 94% off their lows and as of yesterday's close were off the highs by 28%.
Through April 22 the top runner was up 775% from its initial public offering. Stats:
|Company||Stock||Shares||IPO share||4/22 change from||High %||Low %|
|name||Symbol||sold||price||IPO||vs. IPO||vs. IPO|
|Pacific Internet||PCNTF||3.00||$ 17.00||324%||513%||54%|
The surprise isn't in the results but in how investors have driven this stock to a $2.35 billion market cap. That's 309x annualized revenue. On a generous $20 million sales estimate for 2000 the multiple is over 100x.
I think two things could be at play here: 1) investor's genuine enthusiasm for business-to-business Internet stocks; 2) but I also believe investors may be confusing the B-2-B opportunity (which is huge) with one company's potential (which is perhaps bigbutnot yet).
One stock I find more encouraging at these levels and more pleasantly surprising could be Healtheon (NASDAQ:HLTH). In my pre-IPO analysis I was bearish on this stock for one plain reason, the healthcare system in the U.S. is very unwired. The path forward I mentioned for Healtheon at that time was in acting as a roll-up magnet.
Go public, get aggressive and acquire the missing pieces to grow a strong Web presence and Internet-based information and commerce system.
Healtheon announced a $460 million stock swap for healthcare transaction software firm MEDE (NASDAQ:MEDE). The irony is Healtheon first delayed its IPO last year and debuted this year at $8 per share. At $51 Healtheon looks undervalued to me with its new public leverage just starting. Its next step ought to be to acquire Drugstore.com perhaps.
question of the day:
will the market for Internet IPOs stay hot?
email "yes"or "no" in subject header
results next week in emailbag monday!
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