E-Mailbag Monday: divine interVentures, Genuity, Infomediaries


What looks hot for the IPO market this week?

Reply: Perhaps the only heat for this week will be from firework
shows. Because of the Fourth of July holiday, the IPO market will be light.
In fact, there are only two IPOs scheduled.

There could be some action from
divine interVentures
. The firm is an early-stage Net incubator, with an
emphasis on business-to-business (B2B).

However, the IPO has undergone much delay (it was filed on December 15,
1999). But the reason may be the fact that there are complex regulations
for Net incubators. This has apparently also been the case with IdeaLab!

Net incubators are out-of-favor currently, so this could dampen the
offering. But with a slow upcoming week, divine interVentures may have some
upside because it will not compete with other IPOs.

The lead underwriter is Robertson Stephens and the price range is $13-$15.
The proposed ticker symbol is DVIN.

Genuity: Genuine Bargain?

Genuity had its IPO this
week and fell below its offering price. Is it a good deal?

Reply: As a general rule, it is usually not a good idea to buy a
“broken IPO.” And Genuity is probably not an exception to this rule.

True, Genuity is not a concept company. Although it is one of the original
Internet backbones (the company invented the “@” sign and sent the world’s
first e-mail). The company is a spin-off of Verizon (which is the
combination of Bell Atlantic and GTE).

So why the problems with the IPO? Here are some factors to consider. The
IPO was large, allowing the company to raise $1.9 billion. In other words,
it is hard to generate a nice “pop” from large IPOs.

But I think the big reason is losses. The company has not seen any profits
for the last five years. In the first quarter of 2000, losses were a
staggering $210 million and revenues were $248 million.

Buzzword

What is an infomediary?

Reply: The phrase is from a book called Net Worth by John
Hagel and Marc Singer. Basically, an infomediary is the middleman between
the consumer and the vendor of a product. The infomediary is basically a
software agent, in which the consumer feels he or she is getting a good deal
and personalized service. As for the vendor, they get a loyal customer and
critical consumer information.

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