E-Mailbag Monday: Nuance Communications, Healtheon, Peapod
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What looks good in the IPO market this week?
Reply: Look at Nuance Communications. The company is a developer of advanced technology for voice activation. With the hypergrowth of wireless, voice technologies are surging.
One of Nuance's products allows for complex natural language speech recognition for twelve languages and dialects. Another product helps to create voiceprints so you can verify the ID of a caller. Nuance is even planning to launch a voice-activated Web browser.
In all, the company has over 150 customers, such as Charles Schwab, Merrill Lynch and UPS.
Check-Up on Healtheon
You have written about Healtheon recently. What do you think of the company with the investment from Jim Clark?
Reply: Since I wrote my piece on Healtheon (HLTH) , Nasdaq went into a tailspin and so did Healtheon. In fact, last week the company was selling at distressed levels. It was enough to encourage Jim Clark, the co-founder of Healtheon, and John Doerr, the legendary VC for the company, to invest $200 million and $20 million respectively (both are on the board of directors). Besides being very technically savvy, these two also have deep insight into Healtheon.
Actually, even at current prices, the stock looks like a bargain. True, there is intense competition -- such as with the recent talk of B2B exchanges of traditional brick-and-mortar health care companies. Then again, this shows that the Net is a real force in healthcare. As for Healtheon, it has been using its stock as currency to build a well-rounded e-health empire by purchasing ENVOY, Medical Manager, CareInsite and OnHealth.
Besides Clark and Doerr, other big investors this year include Janus Capital ($930 million) and News Corp. ($1 billion).
Peapod: Still Rotting?
You have written about Peapod as a stock to avoid. Is it still something to avoid?
Reply: I still think there is more room on the downside for Peapod (PPOD) . Last week, the company engaged in a major act of desperation. It is suing its former CEO -- who resigned on March 16 for health resigns -- to get back money that was lent to him. How much? $2.6 million. Besides being a bad PR move, it shows that the company is scrambling for any crumbs. Then again, Peapod has only $3 million in the bank.