With the success of CMGI, Idealab!, and Internet Capital Group, it seems
everyone wants to become an incubator. It looks so easy. Rent out an office
(actually, this may not even be necessary); request business plans; provide
some consulting (eg, write the executive summary); and voila, you’re in
So it is no surprise that there are many incubator wanna-bes. When I saw a
company called Net Value
I suspected it too was in the wanna-be category. After all, the company
started as a corporate shell, residing on the topsy-turvy Bulletin Board.
The Bulletin Board market, for the most part, is a disaster for most
investors. The companies get little coverage, volume is light and
manipulation is rampant (especially with the growth of the Net, such as with
online chat boards).
But the closer I looked at Net Value Holdings, the more intrigued I became.
What impressed me was the management team. The Chief Executive Officer, Andrew Panzo, was first
a venture capitalist with Venture Partners. He then founded his own merchant
bank, called Maple Leaf. Lee Hansen, the president, was a senior vice president of
corporate strategy & development at Bank of America. Before this, he was a
financial analyst with Bankers Trust. Darr Aley, a board member, was the VP
of corporate development at Lycos. Stephen George, a board member, was a VP
at Goldman Sachs. John Brine, the VP of marketing and communications, was
the manager of media relationships at CNBC Television.
Interestingly enough, Net Value Holdings recently filed Form 8-A with the
SEC. Now, the company will become a reporting company — which is a major
event that should bring more credibility and liquidity to the stock. What’s
more, the company has filed an S-1, so as to become a member of the NASDAQ.
In all, the company has a portfolio of seven companies. The equity holdings
are anywhere from 10 percent to 100 percent. Here are some examples (for the most part,
Net Value is pegging strong market spaces):
1. AssetExchange: This is a business-to-business network that allows
financial institutions to buy and sell loan portfolios (the focus is on
credit card portfolios).
2. Swapit.com: This is a virtual barter exchange for consumers. The
so-called “secondhand distribution market” is $180 billion.
3. Webmodal: The company is in development of a business-to-business
application to help shippers with freight shipments. The system relies on
intermodal shipping, which can provide substantial cost reductions.
However, these companies are still early. The risk of these companies
cratering is, as a result, very high. But, if several are home runs — such as
through an IPO or acquisition — this could have a tremendous impact on the
stock. With the M&A market heating up and the IPO market continuing to
sizzle, it certainly bodes well for Net Value Holdings.