Here We Go Again, Rate Fear Slams Stocks

Market schizophrenia takes over again as stocks fall. That follows yesterday’s overall market rise. The great debate continues to be interest rates and if they’ll rise. It’s one reason those Internet companies that did secondaries may be better positioned than those that haven’t cashed up. Why? they raised capital when it was cheaper to do so.

Warren Buffett is a master at that, knowing money won’t always be cheap. did a similar move with the $1.5 billion in junk bonds it sold and the $2 billion shelf filed. That’s how Amazon stays in the long game beyond books and music, two very low margin businesses.

If you read the recent Barron’s on Amazon with the cover “Amazon.bomb” the one glaring hole that any real investor or analyst should see: AMZN on a bond/cash per share basis is worth more than the $10 Barron’s said the stock was worth. The bonds and shelf alone add up to $21 per share. If they’re going to analyze a stock perhaps they should do just that.

Today’s snapshot:

  • Infoseek (NASDAQ:SEEK) rockets 13% against the market downturn on news that Disney may acquire the 53% of SEEK it doesn’t own. Disney holds a warrant that allows it to acquire a majority but this move seems to indicate 100%. I think Disney should roll it up with Disney’s entire Internet basket and consolidate the brand under (something I suggested when Disney first did the Infoseek investment last year).

    Also, with Disney Internet leader Jake Weinbaum leaving, some key Infoseek execs already gone, it may be better to have one captain and why not Mickey Mouse, or Steamboat Willie. You know what Wall Street really wants to see from Disney? some imagineering with its Web efforts instead of the me-too portal model it has followed. Over time I think Disney’s Internet could find a substantial valuation. 36 months is my time target for this to be a world-class Web firm. If not by then the window may be closed. My bet is Disney makes it big here.

  • (NASDAQ:KOOP) goes public and soars 83% to $16 7/16 per share today. As I told Reuters I am a little shocked that this early-stage company debuted this strongly. The Web site is well done, however, and shows some depth, key ingredients to building value since a Web site is basically the property investors are buying, its ability to generate revenue and earnings. I am not convinced that KOOP has any key differentiators vs. competitors, except for the Doctor himself, which seems more of a name play. A good resource site. May be attractive to venture-stage investors since revenue is non-existent at this point.
  • BackWeb (NASDAQ:BWEB) debuts with its IPO today, up 64% from pricing to $19 11/16 per share. BackWeb’s corporate software management services and information distribution provide key data flow to large corporations. A rival on the automated software distribution is Marimba (NASDAQ:MRBA) although BackWeb to me represents a more diverse data distribution play.

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