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.
The price range is $14-16, the lead underwriter is Goldman Sachs & Co. and
the proposed ticker symbol is NUAN.
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.
