RealTime IT News

ISDEX Rises Amid Consolidation Speculation

CNET (NASDAQ:CNET) tops ISDEX in gainers this week as the techno-news/developer site and cable programmer is expected to report strong earnings next week. CNET shares rally 50% from January 26 as speculation also centered on it being a possible takeover candidate by a major media company. CNET has a stable of valuable properties and we see it as one of the few pioneering Web firms with brand recognition.

Said another way, this is what ZD and Wired wanted to be but got bogged down in print. Natural-born buyers of CNET, NBC's name has been kicked around. The GE unit already owns 4.9% ofCNET and part of CNET's SNAP!, the guide service. The usual other suspects could be trade publishers like ZD or CMP, but the price may be frothy forthem.

News behind the moves:

  • PSINet (NASDAQ:PSIX) starts a wireless Internet access service with 128 Kbps capabilities in select cities. It plans on upgrading the service to 512 Kbps in 1999 and up to 2 megabits per second in 2000. PSI says it's targeting some 200,000 businesses in its targeted areas.

  • Sportsline USA (NASDAQ:SPLN) reports $9.3 million fourth-quarter revenue with $10.1 million loss. Full year results are $30.55 million vs.$12 million for 1997. Losses for 1998 reach $35.5 million vs. $34.17million loss for 1997.

  • Security Dynamics (NASDAQ:SDTI) posts $46.9 million revenue for 4Q98 vs. $41.1 million for 4Q97. EPS is $0.30 for 4Q98 vs. $0.10 EPS 4Q97. Full-year results are $171.3 million revenue vs. $140.6 million for 1997. Fully-diluted EPS is $0.69 for 1998 vs. $0.42 for 1997.

  • Broadcom (NASDAQ:BRCM) beat estimates with $12.8 million net income or$0.26 EPS vs. the First Call consensus of $0.18 EPS for its fourth quarter. Revenue hits $70 million vs. $17.3 million 4Q97. BRCM also set a 2-for-1 stock split. We think the broadband chip maker could well become the most significant chipmaker in the telco DSL and cable modem market just as the market starts to take off this year and next. BRCM was one of our top 10 stocks to watch for 1999 (see Archives, January 6).

  • eBay (NASDAQ:EBAY) blows away earnings estimates also with $2.8 million4Q98 earnings or $0.07 EPS vs. First Call's target of $0.04 EPS. 4Q98 revenue reaches $19.5 million vs. $2.6 million 4Q97 while total 1998 revenue is $47.4 million vs. $5.7 million. Sets a 3-for-1 stock split.

  • Amazon.com (NASDAQ:AMZN) posts narrower-than-expected losses (without acquisition charges) of $0.14 loss per share vs. First Call's projectedloss of $0.18 per share. Revenue soars 300% to $253 million vs. 4Q97. Full-year revenue is $610 million vs. $148 million in 1997. We think Amazon's in a weird "in between stage" not small enough to enjoy earnings nor quite large enough to be able to throw off incremental earnings on sheer volume. Yet we think Amazon could get there within 12 to 14 months to net income and revenue north of $1.5 billion annually by 2000.

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