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Net Value Holdings: Cradling Tomorrow's Net Companies

With the success of CMGI, Idealab!, and Internet Capital Group, it seems everyone wants to become an incubator. It looks so easy. Rent out an office (actually, this may not even be necessary); request business plans; provide some consulting (eg, write the executive summary); and voila, you're in business.

So it is no surprise that there are many incubator wanna-bes. When I saw a company called Net Value Holdings (NETV), I suspected it too was in the wanna-be category. After all, the company started as a corporate shell, residing on the topsy-turvy Bulletin Board. The Bulletin Board market, for the most part, is a disaster for most investors. The companies get little coverage, volume is light and manipulation is rampant (especially with the growth of the Net, such as with online chat boards).

But the closer I looked at Net Value Holdings, the more intrigued I became. What impressed me was the management team. The Chief Executive Officer, Andrew Panzo, was first a venture capitalist with Venture Partners. He then founded his own merchant bank, called Maple Leaf. Lee Hansen, the president, was a senior vice president of corporate strategy & development at Bank of America. Before this, he was a financial analyst with Bankers Trust. Darr Aley, a board member, was the VP of corporate development at Lycos. Stephen George, a board member, was a VP at Goldman Sachs. John Brine, the VP of marketing and communications, was the manager of media relationships at CNBC Television.

Interestingly enough, Net Value Holdings recently filed Form 8-A with the SEC. Now, the company will become a reporting company -- which is a major event that should bring more credibility and liquidity to the stock. What's more, the company has filed an S-1, so as to become a member of the NASDAQ.

In all, the company has a portfolio of seven companies. The equity holdings are anywhere from 10 percent to 100 percent. Here are some examples (for the most part, Net Value is pegging strong market spaces):

1. AssetExchange: This is a business-to-business network that allows financial institutions to buy and sell loan portfolios (the focus is on credit card portfolios).

2. Swapit.com: This is a virtual barter exchange for consumers. The so-called "secondhand distribution market" is $180 billion.

3. Webmodal: The company is in development of a business-to-business application to help shippers with freight shipments. The system relies on intermodal shipping, which can provide substantial cost reductions.

However, these companies are still early. The risk of these companies cratering is, as a result, very high. But, if several are home runs -- such as through an IPO or acquisition -- this could have a tremendous impact on the stock. With the M&A market heating up and the IPO market continuing to sizzle, it certainly bodes well for Net Value Holdings.