Hey all! Looking ahead to Thursday's WebMethods IPO, I think FBR will be a seriously profitable play off of it's partial ownership:
I expect it to have an incredible couple of weeks due to it's involvement in the WebMethods IPO. I imagine you've heard of the WebMethods offering scheduled for Feb. 10:
news.cnet.com
This is commonly seen by the larger analysts as "one of the hottest IPOs of the year".
FBR is both an investment banker for the deal (one of the underwriters) as well as a partial owner of about 10% of WebMethods itself! The FBR technology venture fund, a venture capital fund started and administered by FBR, owns 8.9% post-offering, a total of 2.7 million shares. In reality, FBR does not directly own all 2.7 million shares. The VC fund does. FBR has some small stake in the VC fund, and also manages it, and thus receives at least 22% of the gain, through management fees, interest and "carry". This recent earnings conference call by FBR (with good VC info at about the 7-8 minute point) discusses this:
vcall.com
FBR also has an on-line brokerage which emphasizes sharing IPO shares with the "little guys", as well as managing secondary offerings for the likes of Broadvision!
So...
The way I see it, WebMethods will be VERY big this week, probably one of the best of 2000. It will likely be compared to and valued over the short-term to it's competition, such as Broadvision and Ariba, and also get a premium for the XML side, which seems like a definite next big thing. This puts WEBM market cap at say 10 to 20 billion, which equals share price of 300-600 medium term. FBRTVP (the VC fund) will thus have perhaps 500 mil to 1 billion in gains, and even a 20-25% share of that is worth 125-250 mil profit to FBR! And this is a company with a current market cap of about 650 million!
The excitement around WEBM this week and next makes FBR look like an easy double, and $50+ sure wouldn't surprise me (IMO). I just don't see how it can not get major volume when people see WEBM and realize FBR's stake in it. There are a few people discussing this on SI, Yahoo, and Raging Bull, but it's definitely still "undiscovered"!
I'm really excited about late this week, WEBM, and FBR seems likely to be along for the ride!
Fritz
p.s. also check out this piece on CBS MarketWatch re: FBR buyout likelihood!:
marketwatch.newsalert.com.
And finally, check the Yahoo quote for links to more news on CBS Marketwatch and FBR's latest release detailing their relationship to FBRTVP:
quote.yahoo.com
-- Fritz :-)
Good Luck to All! |
