Anybody who would have bought an Internet IPO in this table shown at the low would be up at least 13%. Some would have enjoyed as much as a 303% pop from the depths.
As a group these stocks gained a blended 94% off their lows and as of yesterday’s close were off the highs by 28%.
Through April 22 the top runner was up 775% from its initial public offering. Stats:
4/22 change from
The biggest surprise in the bunch to me is VerticalNet (NASDAQ:VERT) which hovers 9 points off its all-time high. The industrial community (vertical) Web site service reported $1.9 million in revenue for first quarter ending March 31, up 412% vs. 1Q98. Net loss was $5.6 million vs. $5.3 million net loss for 1Q98.
The surprise isn’t in the results but in how investors have driven this stock to a $2.35 billion market cap. That’s 309x annualized revenue. On a generous $20 million sales estimate for 2000
the multiple is over 100x.
I think two things could be at play here: 1) investor’s genuine enthusiasm for business-to-business Internet stocks; 2) but I also believe investors may be confusing the B-2-B opportunity (which is huge) with one company’s potential (which is perhaps bigbutnot yet).
One stock I find more encouraging at these levels and more pleasantly surprising could be Healtheon (NASDAQ:HLTH). In my pre-IPO analysis I was bearish on this stock for one plain reason, the healthcare system in the U.S. is very unwired. The path forward I mentioned for Healtheon at that time was in acting as a roll-up magnet.
Go public, get aggressive and acquire the missing pieces to grow a strong Web presence and Internet-based information and commerce system.
Healtheon announced a $460 million stock swap for healthcare transaction software firm MEDE (NASDAQ:MEDE). The irony is Healtheon first delayed its IPO last year and debuted this year at $8 per share. At $51 Healtheon looks undervalued to me with its new public leverage just starting. Its next step ought to be to acquire Drugstore.com perhaps.
question of the
will the market for Internet IPOs stay hot?
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