Shiver me timbers! It’s no secret that cyber-darlings are turbulently
bobbing along in the market’s salty waters of late. But there are scattered
reports from the crow’s nest that a handful of online vessels have recently
encountered the ill-fated Flying Dutchman.
According to legend, ill fortune will befall any crew that should encounter
the cursed ghost ship. Swashbuckling pirates wont sail her, and traders
refuse to deal in its wares. Captain of the SS Peapod (PPOD) was the first to stumble upon
the Dutchman before tragically taking on water off the shores of Wall
Street. Seafaring drkoop.com (KOOP)
put up a valiant struggle before succumbing to the same fate.
In the old days, seamen took to nailing horseshoes to their masts, which are
said to bring luck, in an effort to protect themselves against the ghost
ship encounter. Similarly today, Internet companies find themselves
frequently scrambling toward consolidation through merger or acquisition, in
an effort to stave off untimely demise.
Safety in numbers has been the pervasive theme on the Street, with nearly
$50 billion in iM&A deals during 1999, and upwards of $200 billion expected
to take place through the new year. 2000 is already off to a brisk start, so
let’s take a glimpse at a handful of last week’s Web notables and see how
they break down.
announced plans to acquire software developer Spyglass (SPYG)
in an all-stock deal valued at roughly $2.5 billion. The acquisition allows
the digital interactive TV firm to expand beyond television and into the
nascent wireless market. It will also provide access to Spyglass’ technology
that reformats standard Internet content to display on set-top boxes, better
positioning OpenTV in the interactive TV war.
Most will remember Spyglass for its Mosaic Web browser that now sits
collecting dust somewhere in the Smithsonian. But Spyglass is no creampuff,
posting a respectable $29.6 million in revenues last year, edging out OpenTV’s $26 million. OpenTV thinks it’s high time to dust off Spyglass’ browser
expertise and charge arm-in-arm into the wild wireless Web. Shares of OpenTV
plunged 31 percent for the week on news of the deal, while Spyglass sank 6
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B2B med-supply company Neoforma.com
eiled a one-two punch with the stock acquisition of Eclipsys (ECLP) and its closely held affiliate
HEALTHvision for nearly $1.45
billion and $650 million, respectively. The proposed merger would create a
new company serving the e-healthcare business-to-business marketplace.
Eclipsys is the end-to-end healthcare information software provider who
targeted Shared Medical Systems (SMS) in
an unsolicited $2 billion takeover bid earlier this month. HEALTHvision
provides Web-based solutions to local healthcare organizations, connecting
them with their key constituents.
Neoforma’s chairman and CEO Bob Zollars boldly proclaimed, “From Web-based
clinical solutions to innovative supply-chain initiatives, this new
company’s breadth of offerings will be unsurpassed.” Following the
announcement, U.S. Bancorp Piper Jaffray analyst Daren Marhula put the deal
on the ropes, lowering his rating on Eclipsys to “neutral” from a “strong
buy,” calling the arrangement “confusing.”
In light of drkoop.com’s recent fiasco and due to the cyclical rotation out
of cyber-med stocks, investors gave the exchange a collective thumbs down.
Shares of Neoforma shed nearly 50 percent for the week, while Eclipsys
followed suit, tumbling 30 percent.
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