E-Mailbag Monday: Novatel, Mothernature.com, IEEE 1394

What looks good for the IPO market this week?

Reply: Even though Nasdaq plunged last week, there were still a few
strong IPOs. One was Transmeta
, which surged over 100% on its first day of trading.

As for this week, things do not look good. Although,
Novatel Wireless may
have a decent offering. The company is a developer of wireless data modems
and software.

For the first nine months of 2000, revenues were $33.4 million, which was up
from $5.5 million a year ago. But losses were $30.3 million. In fact, the
company has a negative cash flow of $39 million.

Yet, the company has a strong customer base, including Palm, Verizon,
OmniSky and GoAmerica. And, of course, these customers are growing at
break-neck speed.

The lead underwriter is CS First Boston and the price range is $10-$12 (the
company plans to issue 7 million shares). The proposed ticker symbol is

Mothernature.com: Arbitrage Play?

Do you think there is any more upside on MotherNature.com?

Reply: As of the end of Friday last week, the stock price was about
78 cents per share. As you know,
decided it could no longer be a viable business; so, it decided to do the
honorable thing and liquidate the company.

According to the company, shareholders will get $1 per share. So, isn’t
this an arbitrage opportunity? Well, not necessarily. The $1 per share
will be from cash, as well as intellectual property and other tangible
assets. But, in the tough dot-com environment, it may be difficult to get
good prices on these assets. Also, the company plans to pay 85 cents to
common shareholders by the end of this year and the remaining 15 cents over
perhaps a three-year period.

IEEE 1394: The FireWire Standard

What is IEEE 1394?

Reply: This is a standard for high-speed connectivity among
computers, peripheral devices and consumer devices (such as TVs, digital
cameras and video players). The IEEE 1394 standard is also called FireWire
or i.Link.

The IEEE 1394 standard has been in existence since 1987. Supporters include
Compaq, Microsoft, Sony, Sun and Apple (in all, there are 140 members).

Basically, IEEE 1394 allows for connections – across copper wires – at
speeds of up to 400 Mbps. The market for these devices is expected to grow
from eight million in 1999 to 100 million by 2004.

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