While the browser war subsides into Gatezilla vs. Mozilla, and the network computer goes the way of video pong, here comes resurrected software maker Spyglass (NASDAQ:SPYG) into the “Web devices” market, one that many believed was a myth or a passing in its own right.
Recall that Spyglass was once the Netscape foe and the two went toe to toe in the browser space while Microsoft was busy tweaking its GUI and preaching the world according to interactive TV circa 1994-95. That’s when SPYG hit its all-time high north of $60 per share about the time Microsoft came down from the mountain with tablets proclaiming the Internet was the future, not Interactive TV a la road runner (or wiley coyote).
| Spyglass | SPYG | When |
|---|---|---|
| All-time high | $ 61.00 | 12/26/95 |
| All-time low | $ 4.06 | 12/29/97 |
| Close August 18 | $ 12.94 | |
| Percent off high | -79% | |
| Percent off low | 219% | |
| ) 1998 Mecklermedia, Internet Stock Report | ||
A year after SPYG was in the netherworld of losses trying to convince Wall Street the sky hadn’t fallen after all, a new gizmo gadget called “Web device” would emerge and lead it back to the promised land of profits and honey.
Meanwhile SPYG shares skipped along sideways and within the $5 to $10 range for nearly two years.
Ironically, in April this year SPYG started to take off thanks in part to a deal to be integrated with its browser-bruising rival Microsoft whereby Spyglass is the browser de jour for Windows CE. It also struck deals with NEC.
On April 22 Spyglass reported second quarter fiscal 1998 revenue of $5 million, up 18% from first quarter fiscal 1998 revenue in testimony that devices, and its Surfwatch software filter, were gaining converts.
‘GTE taps Spyglass for a cable set top box’ read the headline on May 4.
But nothing garnered as much interest as the two events of August 17 and 18. CEO Doug Colbeth (who was a guest of ours at Internet World on a panel that with hindsight was perfectly titled “How To Swim With Sharks And Not Get Eaten”) told CNBC he expects 1999 to be a return to profitability for SPYG, which popped 14% to $11.25 per share on August 17 on news that Motorola licensed Spyglass microserver and browser in a “multi-million” deal.
Based on these deals and what looks like the long-awaited debut of the device market, we think SPYG trades at 6x next year’s revenue at a time when Internet software firms command between 5x to 30x or about 15x average so SPYG may be coming in low in our opinion.
For the period of August 11 – 18, SPYG led the pack, quite notable because of where it’s been. Going forward we expect more good news from this one:
| ISDEX( | 18-Aug-98 | % change | Point change | % change | |
|---|---|---|---|---|---|
| The Internet Stock Index | close | from | from | from | |
| www.isdex.com | 11-Aug-98 | 11-Aug-98 | 31-Dec-97 | ||
| ISDEX Geometric Average | 134.21 | -0.4% | -0.50 | 34.4% | |
| ISDEX Price Wtd. Composite | 1,506.22 | 1.4% | 20.72 | 65.3% | |
| NASDAQ | 1,855.12 | 3.5% | 62.42 | 18.1% | |
| DJIA | 8,714.65 | 3.0% | 251.80 | 10.2% | |
> | |||||
| Spyglass | SPYG | $12.94 | 27% | $2.72 | 162% |
| Security Dynamics | SDTI | $14.00 | 23% | $2.63 | -61% |
| Infoseek | SEEK | $28.75 | 22% | $5.13 | 167% |
| CheckPoint Software | CHKPF | $26.13 | 15% | $3.50 | -36% |
| USWeb | USWB | $19.81 | 14% | $2.44 | 111% |
| Netscape | NSCP | $32.13 | 9% | $2.63 | 32% |
| Intuit | INTU | $51.13 | 8% | $3.88 | 24% |
| Lycos | LCOS | $68.00 | 7% | $4.44 | 64% |
| Cylink | CYLK | $11.44 | 6% | $0.69 | 17% |
| WavePhore | WAVO | $10.25 | 6% | $0.56 | 9% |
| Broadband Technologies | BBTK | $3.75 | 5% | $0.19 | -9% |
| Earthlink Network | ELNK | $44.00 | 5% | $2.19 | 242% |
| Network Associates | NETA | $47.88 | 5% | $2.38 | -9% |
| Mecklermedia | MECK | $25.50 | 5% | $1.25 | 3% |
| Onsale | ONSL | $25.56 | 5% | $1.25 | 42% |
| America Online | AOL | $111.50 | 4% | $4.38 | 146% |
| Secure Computing | SCUR | $11.19 | 4% | $0.44 | -5% |
| VocalTec | VOCLF | $9.63 | 4% | $0.38 | -53% |
| CNET | CNWK | $49.25 | 4% | $1.88 | 67% |
| Amazon.Com | AMZN | $128.69 | 4% | $4.69 | 327% |
| PairGain | PAIR | $13.56 | 3% | $0.38 | -30% |
| Concentric | CNCX | $23.75 | 2% | $0.50 | 168% |
| Mindspring | MSPG | $42.63 | 2% | $0.81 | 280% |
| @Home Network | ATHM | $47.31 | 2% | $0.88 | 88% |
| NewsEdge | NEWZ | $7.00 | 2% | -$6.38 | -48% |
| Network Solutions | NSOL | $36.63 | 2% | $0.56 | 179% |
| PSINet | PSIX | $18.69 | 1% | $0.19 | 265% |
| Excite | XCIT | $44.81 | 0% | $0.19 | 199% |
| Broadvision | BVSN | $23.88 | 0% | $0.00 | 267% |
| Sportsline USA | SPLN | $27.63 | 0% | $0.00 | 157% |
| Open Text | OTEXF | $14.63 | -1% | -$0.13 | 9% |
| Verisign | VRSN | $31.50 | -2% | -$0.50 | 125% |
| Axent | AXNT | $21.69 | -2% | -$0.44 | 26% |
| E*TRADE | EGRP | $27.00 | -4% | -$1.00 | 17% |
| Doubleclick | DCLK | $45.50 | -4% | -$2.00 | 168% |
| IDT Corp | IDTC | $22.75 | -5% | -$1.13 | 12% |
| RealNetworks | RNWK | $31.56 | -5% | -$1.56 | 127% |
| CMG Info | CMGI | $75.00 | -5% | -$4.25 | 396% |
| CDnow | CDNW | $13.44 | -6% | -$0.81 | -16% |
| Egghead.com | EGGS | $12.50 | -7% | -$0.94 | 92% |
| Versant Object Technologies | VSNT | $3.31 | -7% | -$0.25 | -76% |
| Open Market | OMKT | $13.00 | -9% | -$1.25 | 35% |
| CKS Group | CKSG | $16.50 | -11% | -$2.00 | 17% |
| N2K | NTKI | $12.69 | -12% | -$1.69 | -13% |
| Metricom | MCOM | $7.03 | -12% | -$0.97 | -27% |
| CyberCash | CYCH | $9.25 | -12% | -$1.28 | -27% |
| Cyberguard | CYBG | $6.75 | -14% | -$1.06 | 20% |
| Security First Net Bank | SFNB | $15.50 | -18% | -$3.38 | 114% |
| CheckFree | CKFR | $12.00 | -49% | -$11.75 | -56% |
| Yahoo! | YHOO | $97.25 | 6% | $5.88 | 181% |
| TOTAL | 1,506.22 | 1% | 14.22 | 65% | |
| SIMPLE AVERAGE | 30.12 | 1% | 0.28 | 65% | |
| ) 1998 Mecklermedia (NASDAQ:MECK), Internet.com | |||||
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