You recommended VerticalNet last year. With the new Microsoft deal, is the
company still a good buy? Or is it overvalued?
Reply: I still think there is much more potential with this stock.
Announced last Friday, Microsoft agreed to invest $100 million into VerticalNet (VERT)
. Also important was that VerticalNet and Microsoft would provide
business-to-business services to small and medium size businesses — and, of
course, Microsoft has extensive access to this market.
I see the Microsoft deal as validation of the company’s leadership. I
would not be surprised to see other major companies team-up with
VerticalNet and thus propelling the company further.
My earlier article is VerticalNet: B2B First Mover (1/5/0).
Turnstone Systems: Making The Turn
What looks good in the IPO market for next week?
Reply: There are 19 companies planned to go public next week.
Perhaps the strongest contender is Turnstone Systems. Local exchange
carriers need to stay competitive and offer more and more useful services.
Of course, providing high-speed Net access is critical. This is done using
DSL (digital subscriber line). Unfortunately, it is complex and
time-consuming to install. Well, Turnstone has a turn-key solution with its
CX100 product line.
Even though the company launched its product in the first quarter of 1999,
the revenues are an amazing $27.2. What’s more, losses are minimal: only
$183,000. Customers include Rhythms Net Connections, Covad Communications,
Lucent and Network Access Solutions.
The lead underwriter is Goldman Sachs and the price range is $15-$17. The
proposed ticker symbol is TSTN.
Going by the Book
I’m just starting to invest. What is the top book you would recommend?
Reply: As you know, there is a glut of investment books. You can
learn about virtually anything: IPOs, biotech, derivatives, day trading,
and even astrology (and how it relates to predicting hot stocks). However,
if I were stranded on a desert island and could choose only book, it would
be One Up on Wall Street: How to Use What You Already Know to Make Money
in the Market. The book was written in 1990, but it is a timeless
work. The author of the book, Peter Lynch, is a legendary investor, who
helped build Fidelity into a financial powerhouse.