RealTime IT News

E-Mailbag Monday: IPOs, Digex, Airprime

What's on tap for the IPO market this week?

Reply: There is only one IPO planned for this week - Urban Cool Networks. But do not be surprised if the IPO does not go out. The company has been attempting an IPO for many months. In fact, the IPO was filed in early December of 1999.

The company runs the site urbancoolnet.com, which is a portal for - yes - urban consumers. The site has 15 channels for content. The scary part of the company? Well, here's a sentence from the prospectus: "We may never be profitable since we have no revenues, have incurred net losses since our inception and anticipate continuing losses."

However, next week expect the IPO market to make its return. So far, there are eight deals in the hopper.

Digex: Short End of the Stick?

WorldCom announced it would acquire Intermedia Communications Inc. in a deal valued at $6 billion and take operational control of Digex Inc. What do you think of Digex Inc. in the short term and long term.

Reply: No question, Digex is a strong company in a fast-growing market. Unfortunately, the upside of the stock could be limiting. Simply put, the reason is that the public shareholders of Digex are minority owners.

Intermedia Communications owned 55% of Digex and had 94% voting interest. Several firms - such as Exodus - were willing to purchase Digex at a nice premium. But since Intermedia is the majority owner, the offers were ignored and instead WorldCom purchased Intermedia. Now WorldCom owns 55% of Digex and has 94% voting interest. In other words, public shareholders are still minority holders of Digex. And who do you think WorldCom will favor? Definitely not minority shareholders of Digex.

CDMA: What Is It?

I've heard lots about CDMA. What does it mean?

Reply: CDMA (Code Division Multiple Access) is a wireless technology for voice and data. The company that has patented the necessary technologies for CDMA is Qualcomm .

CDMA is a fast-growing standard, with about 57 million subscribers across the globe. CDMA is based on complex mathematical algorithms, making it possible for multiple users to share the same radio channel. That is, CDMA has been able to increase the capacity of cellular and PCS service providers.

Expect many hot start-ups to capitalize on CDMA and hit the public markets. A promising one is Airprime, which is developing high-speed wireless solutions for the OEM marketplace. Key to this is proprietary modem technology that uses RF and baseband technologies.