Beginning Tuesday, The Midday Report each month will review
the stock and financial performance of Internet companies as they near
the anniversaries of their public offerings. Today we’ll look at Exodus
Communications, CyberShop International and ISS Group, all of which went
public last March.
Exodus on the upswing
With a four-month surge in share prices and a 2-for-1 stock split
pending this week, Exodus Communications looks for
now to be a solid investment for anyone who bought prior to last
Based in Santa Clara, Calif., Exodus offers companies with Web sites a
range of outsourced services, including server hosting, Internet access
and site management. Its CEO is former Apple Computer Inc. chief technology officer
Through most of last year the company’s stock, offered at $15 per share,
traded in the $20 to $45 range – pretty good, especially at the top part
of that range, but not a chart that spells Internet shooting star.
Exodus’ stock price – along with that of many other public Internet
companies – hit bottom on Oct. 7, with some shares selling for just 50
cents above the initial offer amount. Since then it’s been all uphill
for Exodus and its investors. The company’s stock price closed above $50
for the first time on Dec. 10 and reached $75 on Jan. 7.
Share price surged to $113 on Jan. 28 following release of a year-end
earnings report that showed impressive revenue growth and the
announcement of the stock split, which is scheduled to be voted on by
shareholders on Thursday.
Exodus’ stock opened Tuesday at $103.94 a share.
CyberShop’s sluggish shares
You can buy practically anything from CyberShop International’s Web site
– clothes, watches, furniture, toys, gourmet food – anything,
apparently, except a consistently robust stock performance.
Priced at $6.50 per share, CyberShop’s stock has spent most of its one
year on Nasdaq in single-digit land.
It’s brief shining moment came on Nov. 30, when it share prices briefly
hit the $30 mark, only to fall under $20 by day’s end. As with Exodus,
the low point came on Oct. 7, when some CyberShop shares traded for a
measly $2.75 each.
After trading between $10 and $12 for most of January, CyberShop’s stock
has been trading below $8 since mid-February. Even the announcement on
Feb. 16 that 1998 revenues were 222% above 1997’s ($4.8 million to $1.5
million, respectively) failed to move share prices for the New
However, rumors of an advertising and marketing agreement with Yahoo – a
deal announced yesterday (March 15) – spiked shares up to $12 last
Friday. CyberShop stock opened Tuesday at $9.375 a share.
ISS continues to soar
ISS Group, parent company of Internet Security Systems, jumped out of
the gate when it went public last March, closing on opening day at $40 a
share, nearly twice the $22 offer price.
Since then the Atlanta-based company’s stock performance has been
remarkably consistent, trading for the most part through last year from
the high $30s through the mid-$40s.
After dropping down to $17 a share on (when else?) Oct. 7, ISS stocks
climbed back to their previous trading range in December, just in time
to catch the latest Internet bull market. ISS stock now is trading near
its all-time high ($84 on Jan. 11), opening Tuesday at $83.
On Jan. 25, ISS reported fourth-quarter revenues of $13 million, a 157%
increase over Q4 ’97 revenues, and 1998 revenues of $35.9 million, 167%
above 1997’s $13.5 million revenue. Net loss in 1998 were $4.1 million,
but losses declined from $1.64 million in Q1 to $.79 million in Q4.