First reader up writes:
“Enjoyed your piece on Alta Vista. Can you explain how this (Alta Vista
spin out) will work with CPQ shareholders? I own some CPQ, will I get some
AltaVista shares when it goes public? How do you value how many AV shares
per CPQ share you might get? I don’t “qualify” for IPO shares and probably
won’t be able to buy any until it is in nosebleed territory. What do you
think of buying CPQ to play the AV deal?”
Reply: No official IPO documents have been filed for AltaVista.
Until they are we cannot speculate how Compaq will proceed. Compaq is a $74
billion market capitalization company so we don’t think many investors
would own CPQ just for its AltaVista assets. More once (if) Compaq makes a
real move.
Broadly Speaking
“I enjoy your newsletter and your excellent evaluations of Internet stocks.
You have had good things to say about Broadcom Corp., which makes chips for
cable boxes and xDSL modems. Right now they have a dominant market share
for what they make. Could you explain where their future competition is
going to come from?
Given the rapid growth that is expected in this
sector, what is to keep larger semiconductor manufacturers, like Intel,
from moving into their turf?”
Reply: Broadcom competes against Rockwell, Philips, LSI Logic,
VLSI, SGS-Thomson, C-Cube, Toshiba, Lucent, Level One, National
Semiconductor, AMD, Analog Devices, Alcatel, Motorola and Globespan across
its different product lines already. Intel could be a threat if it wants to
be. We think the Asian chipmakers may pose the longest-term threat if a
Sony or Samsung starts mass-producing cable modem boxes like they did TVs
(or if TVs come bundled with cable modem innards).
Home Is Where The Exchange Ratio Is
“Do you have info about the ATHM-XCIT deal. I would like to know more about
the value of the Excite stock. Is it linked with the ATHM value since the
deal has been done?”
Reply: The deal was announced January 19 but not “done” since it
must be approved by shareholders and others (that process is underway now).
@Home (NASDAQ:ATHM) agreed to issue 1.041902 shares of common stock for
each share of Excite (NASDAQ:XCIT). When the deal was announced the value
was $6.7 billion.
Here’s a part of the offer that many people probably
didn’t look at: @Home has the option to acquire a 19.9% interest in Excite
which becomes exercisable “under certain customary circumstances.”
Online Brokers Or Fixing?
“I am constantly having trouble using my online broker. I have been with
the company since they started years ago, but I am becoming quite sick of
not even being able to make a trade because they’re always having trouble
with their servers (now if everyone would just switch back to mainframes .
. . ). I was wondering whether you might be willing to poll your readers
and find out which online brokers are most reliable.”
Reply: Exasperated-Trade? You didn’t say who your broker was but
there’s been much publicized bugs at E*TRADE (NASDAQ:EGRP) recently.
Ironically, it was ranked #1 by third-party surveyors. with the glitches
we’ll see if that holds. But your wish is our command. Readers who want to
vote for their favorite Web-based broker can do so here –
click now
Convergence Or Glue
“I enjoy your column greatly; however, what I would also be curious about
is how the stocks that are analyzed flow through to other business sectors
and companies. With the convergence of voice, video and data, and the
growing importance of cable as a medium to deliver Internet content, I
think it would greatly interest your readers to learn how many high
technology
companies are closely interrelated with Internet companies.”
Reply: Many high-tech firms have Internet capabilities built into
services or products, too many to list. In fact, most media, technology,
PC, communications and entertainment corporations are Internet enabled to
some degree. The rollout of video and cable is not so much convergence as
evolution of the species.
If we were to look at the above five industries
— media, technology, PC, communications and entertainment — at the center
of this would be “Internet.” We see it as the glue of the future for all of
them.
HotWatch 10 For ’99
“Congratulations on some prescient calls in your early January “Ten to
Watch” list (ISR, January 6). Considering how incredibly well they all
did, on average, you’re going to have a pretty hard time keeping pace with
yourself in your February subscriber’s newsletter.”
Reply:
HotWatch updates month to month but also maintains the stocks it deems
worth watching no matter if they were picked in January or any month.
Accolades for Internet Stock Report:
"Fresh and provocative" -CBS
Marketwatch, who named
Steve Harmon one of the top Internet stock analysts and only independent
one honored
"I am a huge fan of Steve Harmon’s analysis"
-Kleiner Perkins’ John Doerr
