With stocks taking cues from a bad episode of Jerry Springer meets the
Starr Report where the unexpected is the norm, Internet.com’s IPO Index
tuned into a program of a different nature this past week. The focus is on
the pure discovery channel, featuring liquidity of another sort: software
wholesale e-tail network Digital River (NASDAQ:DRIV).
DRIV debuted August 11 to zero fanfare, no splash and plenty of burned
investors who bought shares in a company that owns 19% of DRIV, Tech
Squared. Ouch!
DRIV’s less-than-gushing IPO, however, seems to have found a few believers
lately as DRIV shares gained 24% to $7.50 since September 10.
INTERNET.COM’S | Ticker | Share price | Share price | % change | % change |
IPO INDEX | symbol | 9/17/98 | 9/10/98 | week | from IPO |
Digital | DRIV | $7.50 | $6.06 | 23.7% | -11.8% |
Broadcom | BRCM | $72.81 | $66.50 | 9.5% | 203.4% |
Netgravity | NETG | $10.19 | $9.44 | 7.9% | 13.2% |
CDnow | CDNW | $8.63 | $8.00 | 7.8% | -46.1% |
24/7 | TFSM | $11.13 | $10.50 | 6.0% | -20.5% |
WavePhore | WAVO | $5.81 | $5.50 | 5.7% | -38.0% |
Inktomi | INKT | $62.94 | $62.88 | 0.1% | 249.7% |
GeoCities | GCTY | $22.88 | $23.75 | -3.7% | 34.6% |
ISS | ISSX | $27.44 | $28.56 | -3.9% | 24.7% |
Cyberian | COOL | $7.31 | $7.88 | -7.1% | -59.4% |
Broadcast.com | BCST | $35.63 | $38.75 | -8.1% | 97.9% |
Exodus | EXDS | $17.00 | $20.88 | -18.6% | 13.3% |
TOTAL | 289.25 | 288.69 | |||
AVERAGE | 24.10 | 24.06 | 0.2% | 52.8% | |
| ) 1998 Mecklermedia (NASDAQ:MECK), Internet.com | |||||
Digital River provides more than 1,600 software publishers and online
dealers back-end turnkey solutions to sell more than 120,000 software and
other digital products.
While that may not offer DRIV the kind of brand-bang that gets Wall Street
excited, over time we believe providing a network of software sales looks
an awful lot like what DoubleClick (NASDAQ:DCLK) does with ads.
Only this is software distribution and not advertising. It’s the network
that matters. Another example may be Amazon’s affiliate model, which is
another name for bookselling network. Get passed the semantics and the
essence looks similar.
CDnow (NASDAQ:CDNW), which almost went the way of the LP in the past few
months, showed some signs of life on deals it struck that allows its
customers to buy custom CDs with whatever songs they wish. CDnow offers
300,000 songs and is featured on Yahoo!, Lycos, Lycos-Bertelsmann,
Webcrawler, Tripod, Geocities, MTV/VH1, Rolling Stone Network, and CBS.com.
We think CDnow’s blending of old and new (customization) adds a much-needed
dimension to its offering. While not unique, CDnow, as the leading music
seller on the Web, can now offer this to its 600,000 customers.
Wavephore’s (NASDAQ:WAVO) 5.7% rise to $5.81 per share may come as little
consolation to a firm with big ideas and little stock movement. Consider
the story and stats from its company news vault: “WavePhore’s WaveTop
allows PC’s equipped with a TV tuner card to receive, decode and cache
web-related content without the bottleneck of the Internet or tying up a
telephone line. The free, advertising supported WaveTop service provides a
wide range of multi-media programming, including news, investment advice
and information, children’s programming, weather, consumer reports,
software downloads and much more, all supplied by the Web’s leading content
providers.
Distributed nationally via the unused portion of television signals from
264 PBS member stations around the country, WaveTop currently reaches the
top 100 U.S. markets, representing over 85 percent of all U.S. households.
It will reach more than 99 percent of U. S. households by year-end.”
That kind of talk would get many a venture capitalist or corporate partner
extremely interested in the converging world of TV-PC-toaster. For all
that, WAVO market cap sits at a near-52-week low of $129 million. For the
six months ending June 30, WAVO revenues were up 33% to $12.2 million with
net losses of $10.7 million. Annualized that’s a 5x revenue multiple for
the kind of technology that Microsoft or another may want bragging rights
to someday.
| SPECIAL REPORT! The Internet World 50 (IW50), the top 50 Internet companies ranking: 50 Net Companies, By Sales Net Companies, By Stock-Market Value Net Companies, By Stock Performance Since IPO 37 Net Companies, By Annualized Stock Return of the Internet CEOs Every Internet investor will want to see these listings! |
Internet
Investment Symposium ’98 @ Fall Internet World!
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