>>It is not really a 'net company...<<
Good observation. The following article is from internet.news.com:
internetnews.com
Dot.Frauds on the Run June 25, 1999
By Chris Nerney
Senior Analyst Stock Report Archives
The game could be up for those non-Internet companies dressed in
cyber-clothing.
Dazed and panicky investors may not have fully appreciated the beneficial effects of the recent Internet stocks slump, but it's now clear that the newly skeptical atmosphere has had one immediate and positive impact: Bogus Internet companies are being exposed and punished.
And these companies know it. You can bet that's why Vermont-based GreenMountain.com pushed back its IPO from Thursday to next week, reduced the number of shares it will offer from 25 million to 12 million shares and cut the price range from $11-$13 to $9.
Company executives and the IPO's underwriters, including Prudential Securities and BancBoston Robertson Stephens, clearly must have known the market would never swallow a $250 million offering from a company with $1.5 million in revenue and $46 million in losses in 1998, especially a purported "Internet" company that does what GreenMountain.com does.
Which is to resell electricity generated from "green" power resources such as wind, geothermal and landfill gas (gas from a landfill is "green"?) to customers in California and Pennsylvania. Formed in 1997 as Green Mountain Energy Resources, the company says "more than 99% of our revenues have come from green electricity sales" in those two states.
Here's GreenMountain.com's link to the Internet: It has a Web site offering green educational information to users and runs banner ads on Yahoo! Yeah, supposedly it "markets" its services online, but so what? I'm sorry, but as noble as the company's goals may be, none of that makes it a dot.anything.
Another Internet phony was hammered last week.
Streamline, a Boston-area food delivery company, closed on its first day of trading last Friday at $7.63, or 24% below its $10 offer price. If you consider Streamline an Internet company, that's the worst debut of the year for a 'Net IPO.
But Streamline is hardly a pure 'Net play. The company was formed six years ago to deliver food and other consumer items to households in and around Boston. Customers could place orders via phone or fax. Now the majority of orders are received through the Internet.
All well and good, but surely not an "Internet" play in the manner of a Lycos, eToys or Wit Capital.
I say it's time to out these Internet imposters. I'll be scouring the S-1s for clues about who is and who isn't a real Internet company.
To make this determination, I will ask the following: Would this company exist if the Internet did not exist? If the answer is no, then it's an Internet company. If it is yes, as is the case with Streamline and GreenMountain.com, then it simply is not an Internet company. |
