ISDEX Shuffles: VocalTec Calls One In, CyberCash Beyond Nickels

ISDEX,
The Internet Stock Index, shows slight gains as a group since November 11.
Of this group of 50 stocks, two blasts from the past top the list:
VocalTec and CyberCash.


First VocalTec (NASDAQ:VOCLF). Amazing when you
consider that there’s only a few “IP” communications pure play stocks in
existence. “IP” (Internet Protocol, the lingua franca of the global
computer network). VOCLF shares are up 24% the past week leading all ISDEX
gainers, yet still off 40% for the year.


An agreement with Cisco
(NASDAQ:CSCO) to make their respective IP communications products “speak”
to each other (so to speak), drove up VOCLF nearly 34% November 12. The
news itself didn’t seem that big but it did highlight what VocalTec has
been plodding along doing for several years now: leading the packetized
voice over Internet industry.




















































































































































































































































































































































































































































































ISDEX ®

 

17-Nov-98

% change

Point change

% change

The Internet Stock Index

 

close

from

from

from

www.isdex.com

 

 

03-Nov-98

03-Nov-98

31-Dec-97

 

 

 

 

 

or from IPO*

ISDEX

 

207.35

1.0%

2.09

107.6%

NASDAQ

 

1,878.52

0.7%

12.90

19.6%

DJIA

 

8,986.28

1.4%

122.30

13.6%

 

 

 

 

 

 

VocalTec

VOCLF

$12.38

24%

$2.38

-40%

CyberCash

CYCH

$10.88

23%

$2.06

-14%

CNET

CNWK

$59.00

19%

$9.63

290%

N2K

NTKI

$10.81

16%

$1.50

-26%

Amazon.Com

AMZN

$148.50

13%

$16.75

393%

Earthlink Network

ELNK

$56.06

12%

$6.00

335%

Lycos

LCOS

$60.50

11%

$6.13

192%

Onsale

ONSL

$22.88

11%

$2.31

27%

CDnow

CDNW

$13.25

10%

$1.25

-17%

Spyglass

SPYG

$17.75

8%

$1.31

259%

CheckPoint Software

CHKPF

$29.38

7%

$2.00

-28%

24/7 Media*

TFSM

$18.13

7%

$1.13

29%

ISS Group*

ISSX

$37.13

5%

$1.88

69%

Beyond.com

BYND

$16.44

4%

$0.69

83%

America Online

AOL

$150.75

4%

$6.25

233%

Netscape

NSCP

$29.25

4%

$1.13

20%

Broadvision

BVSN

$15.81

3%

$0.44

143%

Cisco

CSCO

$68.75

3%

$1.75

85%

@Home Network

ATHM

$49.38

3%

$1.25

97%

Verisign*

VRSN

$37.38

2%

$0.88

167%

Excite

XCIT

$52.69

2%

$1.06

251%

Inktomi*

INKT

$132.00

1%

$1.88

633%

Open Text

OTEXF

$14.00

1%

$0.13

5%

GeoCities*

GCTY

$42.75

1%

$0.38

151%

Sportsline USA

SPLN

$16.44

0%

$0.06

53%

Yahoo!

YHOO

$176.75

0%

$0.19

410%

Mecklermedia

MECK

$28.50

0%

-$0.13

15%

Security First Technologies

SONE

$17.00

-1%

-$0.13

134%

E*TRADE

EGRP

$22.50

-1%

-$0.25

-2%

Network Associates

NETA

$45.94

-1%

-$0.63

-13%

Infoseek

SEEK

$35.75

-2%

-$0.63

233%

eBay*

EBAY

$128.63

-2%

-$2.25

615%

Egghead.com

EGGS

$13.63

-2%

-$0.25

110%

Exodus*

EXDS

$33.94

-2%

-$0.69

126%

Axent

AXNT

$24.13

-2%

-$0.50

40%

Mindspring

MSPG

$56.06

-2%

-$1.31

400%

PSINet

PSIX

$17.88

-2%

-$0.44

249%

Verio*

VRIO

$16.19

-4%

-$0.69

-30%

Network Solutions

NSOL

$64.50

-4%

-$2.75

391%

Doubleclick

DCLK

$34.88

-5%

-$1.81

105%

CKS Group

CKSG

$26.63

-5%

-$1.50

88%

CMG Info

CMGI

$74.38

-6%

-$4.88

392%

USWeb

USWB

$18.88

-7%

-$1.38

101%

Broadcom*

BRCM

$88.81

-8%

-$7.69

270%

Open Market

OMKT

$7.88

-8%

-$0.69

-18%

Concentric

CNCX

$25.75

-8%

-$2.25

190%

Broadcast.com*

BCST

$49.75

-10%

-$5.50

176%

IDT Corp

IDTC

$18.19

-12%

-$2.44

-10%

RealNetworks

RNWK

$41.25

-14%

-$6.50

197%

Security Dynamics

SDTI

$10.88

-16%

-$2.13

-70%

*1998 IPO

There’s also a tad bit of irony in VocalTec still pioneering what an
Internet phone call and call center is, but getting nothing but “busy”
signals from Wall Street. To give it some historical perspective, the last
time VOCLF shares traded north of $30 a cigar was for smoking and not a
footnote in the Starr Report.


VOCLF trades at a typical software stock range of 5x annualized revenue.
For its September quarter revenue hit $6.5 million with a $3.9 million
loss. For 1999 we think VocalTec could show some upside as and if the
expected market for IP telephony starts to find its way into corporations.


Yes, the sound quality (for home users anyway) today reminds some
listeners of the glorious days of AM radio (or a typical broadcast coming
off Broadcast.com). But inside the firewall on fat pipes IP telephony, with
the new things you can do with it with virtual PBX, call centers,
forwarding, broadcast calling, groupcalls, etc., looks very promising to
us.


Said another way, at what we think its “venture capital-like”
valuation, VocalTec looks like a possible R&D plug and play candidate for a
larger networking/IP/backbone player.


On another back-from-the-bog story,
CyberCash (NASDAQ:CYCH), the transaction firm with more in common with a
William Gibson novel than anything in years past, has slowly migrated to a
non-virtual business model with credit card merchant service authentication
over the Internet abilities.


In fact CyberCash’s consumer services are
only a small part of its institutional, merchant, and financial industry
solutions. November 16 it announced that Netscape (NASDAQ:NSCP)
incorporated CyberCash credit and check payment services in Netscape’s
BillerXpert Internet bill payment application.


The other big climbers in
ISDEX the past week all rode the e-tail bonanza that we said was coming (see
Internet Stock Report, November 10). Investors doing a little holiday
shopping snatched up shares of book-music-video-gift seller
Amazon.com.


Meanwhile, CNET also rose on e-tail expectations for computer
sales, up 19% to $59, followed by N2K (NASDAQ:NTKI) with a 16% jump to
$10.81 per share on two things: 1) its pending merger with CDnow and 2)
NTKI shares had room to run given a large dose of ignoring them from Wall
Street most of the past few months.


Of the dogs and duds of the week, we
continue to wonder what’s wrong with Security Dynamics (NASDAQ:SDTI), down
70% year to date and 16% this week. SDTI posted $40.8 million third-quarter
revenue and $3.2 million net income. While net income was lower than the
previous year revenue growth was 14% vs. 3Q97. Also, we wonder how many
tire kickers know that SDTI has $153 million cash. That means we think SDTI
trades effectively at about 1.5x next year’s revenue.

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