Per Briefing.com Target $87.00 must read!!
21-Dec-99 11:00 -- 12:00 ET
Covad Communications (COVD) 55 7/8 +1 15/16: ING Barings initiates coverage of DSL Internet and network access provider with a "strong buy" rating and $87 target price, calling Covad the industry leader in pure-play DSL universe; strategic relationships and strong cash position cited.....
14-Dec-99 11:00 -- 12:00 ET
Netopia (NTPA) 46 1/2 +9/16: BancBoston Robertson Stephens raises their price target on Internet and eCommerce infrastructure provider to $75 as they believe the company is lining up additional contract wins with AT&T (T) and Covad (COVD) and recent pullback in stock price creates a buying opportunity.....
07-Dec-99 13:00 -- 14:00 ET
Covad Communications (COVD) 58 1/4 +4 3/16: JP Morgan initiates coverage of Competitive Local Exchange Carrier with a "buy" rating and $100 18-month price target; they estimate the 2002 DSL access market at $4 bln, growing at a 120% rate for the four-year period......
03-Dec-99 14:00 -- 15:00 ET
Covad Communications Group (COVD) 53 9/16 -1 13/16: Donaldson, Lufkin & Jenrette initiates coverage of competitive local exchange carrier with "buy".....
09-Nov-99 13:00 -- 14:00 ET
Covad Communications Group (COVD) 51 3/8 -15/16: --UPDATE-- E*Offering initiates coverage of CLEC with a "buy" rating.....
09-Nov-99 12:00 -- 13:00 ET
Covad Communications Grp. (COVD) 51 11/16 -5/8: Pacific Crest Securities upgrades this competitive local exchange carrier (CLEC) from "buy" to "strong buy"; COVD operates the largest broadband access network in the U.S. and is expanding its footprint to over 40% of US homes by end of 2000; price target is $100.....
04-Nov-99 15:00 -- 16:00 ET
Netopia Inc. (NTPA) 56 1/2 +1/4: Pacific Crest is expecting solid results from this Internet products and services company when they report earnings after the close today; their EPS estimate is a loss of $0.05, the First Call mean is a loss of $0.06; Pacific Crest also is expecting news on their relationship with Covad (COVD) as well as additional partners and co-marketing relationships; rating is "strong buy".....
04-Nov-99 BEFORE THE OPEN
Covad Communications (COVD) 44 3/16: digital subscriber line (DSL) Internet access provider signs a deal with Yahoo! Inc. (YHOO 180 5/8) to develop a co-branded, My Yahoo!, with content and services for broadband-enabled businesses and consumers; COVD also priced 13 mln shares at $43 for a secondary offering; see press release ; see press release .....
26-Oct-99 09:30 -- 10:00 ET
Netopia Inc. (NTPA) 48 3/8 -3 5/8: Internet products and services company announces a 14-month deal with Covad Communications (COVD 47 1/2 +1 3/16) to supply DSL (Digital Subscriber Line) routers for end-users; see press release .....
01-Oct-99 BEFORE THE OPEN
Covad Communications Group Inc. (COVD) 43 19/32: Competitive Local Exchange Carrier (CLEC) announces it will file for a secondary offering to sell 13 mln shares of common stock to fund capital expenditures and related development and marketing expenses for network expansion into new geographies; see press release .....
13-Sep-99 11:00 -- 12:00 ET
Micron Electronics Inc. (MUEI) 11 -3/16: desktop and notebook PC systems and network servers developer announces an agreement with Covad Communications (COVD 48 +3/8) to to offer high-speed Internet connection via DSL; see press release .....
07-Sep-99 14:00 -- 15:00 ET
Covad Communications (COVD) 48 +5/16: Morgan Stanley Dean Witter raises estimates on Competitive Local Exchange Carrier (CLEC) after the company announced plans to expand its DSL network; revenue estimate for C2000 goes from $163 mln to $192 mln and C2001 from $287 mln to $409 mln; 12-month price target also raised from $60 to $65.....
03-Sep-99 BEFORE THE OPEN
Covad Communications (COVD) 43 13/16: Deutsche Banc Alex.Brown upgrades Competitive Local Exchange Carrier (CLEC) from 'buy" to "strong buy" and raises target price from $70 to $90. DLJ also reiterating "buy" saying COVD continues to lead industry with its high line counts and central office count, as well as its latest market expansion. Increasing loss per share est for 1999 from $2.70 to 3.13 and 2000 from $3.30 to $5.76 as a result of marketing programs; COVD is trading up 2 3/16 at 46.....
27-Jul-99 09:30 -- 10:00 ET
Covad Communication Group Inc. (COVD) 54 3/4 +2 1/8: Juno Online Services, Inc. (JWEB) 20 1/8 +1 9/16: broadband access provider of Digital Subscriber Line (DSL) services, COVD, and ISP, JWEB, announce an agreement whereby Juno users will be able to access the Internet using COVD's high-speed broadband DSL lines; see press release .....
26-Jul-99 AFTER THE CLOSE
Covad Communications (COVD) 52 5/8 -4 1/4: provider of high-speed Internet access reports a Q2 loss of $0.61 a share, in line with the First Call mean, vs a yr-ago loss of $1.11; revenue rose to $10.8 mln, 93% sequential improvement; see press release.....
30-Jun-99 BEFORE THE OPEN
Covad Communications Group (COVD) 41 3/8: Morgan Stanley Dean Witter initiates coverage of competitive local exchange carrier (CLEC) with an "outperform" rating.....
22-Jun-99 15:00 -- 16:00 ET
Covad Communications Grp. (COVD) 44 3/8 -1 7/8: Banc of America Securities initiates coverage of Competitive Local Exchange Carrier with a "buy" rating and $55 18-month price target.....
18-Jun-99 14:00 -- 15:00 ET
Covad Communications Group (COVD) 43 +3 7/16: Donaldson, Lufkin, Jenrette initiates coverage of packet-based Competitive Local Exchange Carrier (CLEC) with "buy" and a 12-month price target of $54.....
25-May-99 11:00 -- 12:00 ET
Covad Communications Grp. (COVD) 47 3/4 -1 3/4: Pacific Crest Securities reiterates "buy" rating on packet-based Competitive Local Exchange Carrier that provides high-speed digital communications services; COVD's portal strategy recently unveiled with Healtheon/Web MD investment; analyst believes recent profit taking in the issue creates an attractive entry point.....
26-Apr-99 AFTER THE CLOSE
Covad Communications (COVD) 108 9/16 +9 1/16: provider of high-speed digital communications services reports a Q1 loss of $0.84 a share, three cents narrower than analysts were expecting, vs a yr-ago loss of $0.59; see press release .....
12-Apr-99 BEFORE THE OPEN
PSINet Inc. (PSIX) 52 1/8: Internet service provider concludes an agreement with Covad Communications (COVD 81 1/2) to launch PSINet DSL (Digital Subscriber Line) services; see press release.....
Inplay
07-Dec-99 13:40 ET
Covad Communications (COVD) 59 1/8 +5 1/16 (+9%): JP Morgan initiates coverage of Competitive Local Exchange Carrier with a "buy" rating and $100 18-month price target; firm estimates that the DSL access market will grow to $4 bln by 2002, expanding at a 120% annual clip over the four-year period.
23-Nov-99 09:44 ET
Voyager.net (VOYN) 12 1/2 +5/8: Internet access provider and Covad Communications (COVD) launch services in Southeast Michigan and Chicago.
23-Nov-99 09:07 ET
Covad Communications (COVD) 62 5/8: Broadband services provider announces deal with Internet infrastructure service provider ICG Communications (ICGX) to jointly develop Voice over DSL service offerings by combining their expertise in local service and broadband technology.
18-Nov-99 12:18 ET
DSL Stocks Rally on FCC Ruling (OPENX) : Federal Communications Commission Approves line sharing program that would compel local phone carriers to share copper phone lines with providers of high-speed Internet access... Stocks benefitting from the news include Covad (COVD 66 1/8 +3/4), Copper Mountain (CMTN 97 7/8 +5 1/8), Tut Systems (TUTS 42 5/8 +2 1/2), Rythym NetConnections (43 3/8 +4 1/16), NorthPoint Communications (NPNT 38 +3).
04-Nov-99 08:18 ET
Covad Communications (COVD) 44 3/16: --Update-- Digital subscriber line (DSL) Internet access provider signs a deal with Yahoo! Inc. (YHOO 180 5/8) to develop a co-branded, My Yahoo!, with content and services for broadband-enabled businesses and consumers.
04-Nov-99 07:45 ET
Covad Communications (COVD) 44 3/16: Trading down 9/16 on Instinet after pricing 13 mln share secondary at $43.
26-Oct-99 10:00 ET
Netopia Inc (NTPA) 49 1/4 -2 3/4 (+5%): Company signs 14 month agreement to supply Covad Communications (COVD) with DSL (Digital Subscriber Line) routers for end-users. Stock experiencing some profit-taking this morning after surging more than 9 pts yesterday. Volume 207K; intraday range 48 3/8 to 51 3/4.
11-Oct-99 09:31 ET
Covad Communications (COVD) 42 15/16 +1 1/16 (+2.5%): Broadband access and services provider announces Q3 operating statistics; says subscriber lines increased 86% to 31,000 lines; homes and businesses passed increased 62% during the quarter to 25 million.
13-Sep-99 11:12 ET
Micron Electronics Inc. (MUEI) 11 -3/16: Desktop and notebook PC systems and network servers developer announces an agreement with Covad Communications (COVD 48 +3/8) to to offer high-speed Internet connection via DSL.
03-Sep-99 08:52 ET
Covad Communications (COVD) 43 13/16: --Update-- Trades 46, up 2 3/16, after Deutsche Banc Alex.Bown upgrade and DLJ's positive comments.
03-Sep-99 08:43 ET
Covad Communications (COVD) 43 13/16: Deutsche Banc Alex.Brown upgrades Competitive Local Exchange Carrier (CLEC) from 'buy" to "strong buy" and raises target price from $70 to $90. DLJ also reiterating "buy" saying COVD continues to lead industry with its high line counts and central office count, as well as its latest market expansion. Increasing loss per share est for 1999 from $2.70 to 3.13 and 2000 from $3.30 to $5.76 as a result of marketing programs.
25-Aug-99 14:40 ET
Market Movers (OPENX) : Grand Toys (GRIN 25 15/16 +10 5/8); intraday high 30 1/4... Mortgage.com (MDCM 15 1/2 +7 5/16); intraday high 15 13/16... Paradyne Networks (PDYN 52 3/4 +7 3/4); intraday high 54 1/4... E-Loan (EELN 38 9/16 +8 13/16), intraday high 39 5/16... Covad Communications (COVD 50 1/4 +6 1/4); intraday high 50 3/8.... Northpoint Communications (NPNT 27 15/16 +4 13/16); intraday high 27 15/16.
19-Aug-99 08:32 ET
Voyager.net Inc (VOYN) 9 1/2: Internet service provider teams with Covad Communication (COVD) to provide high- speed DSL access across the Midwest to both business and consumer markets.
27-Jul-99 09:57 ET
Juno Online Services (JWEB) 20 1/16 +1 1/2 (+8%): Company announces deal with Covad Communications (COVD 56 7/8 +4 1/4) that will give JWEB subscribers high-speed Internet access nationwide. (Press Release)
23-Jul-99 15:12 ET
Reporting Monday (OPENX) : The following tech companies are due to release earnings after-the-close Monday: eBay (EBAY 108 5/16 -3/8), Covad Communications (COVD 59 1/8 +3 5/8), Mail.com (MAIL 20 1/8 -1 3/16), JDS Uniphase (JDSU 157 5/8 -2 1/8), BackWeb Tech (BWEB 29 1/2 -7/8)... Wall Street expecting EBAY to report a profit of $0.03 a share; estimates range from $0.01 to $0.04... For detailed list of company scheduled to release next week, see Briefing.com's Tech Earnings Calendar.
19-Jul-99 09:18 ET
eSoft Inc (ESFT) 3 9/16: Developer of Internet access solutions for small businesses inks deal with Covad Communications (COVD) for distribution of DSL service. Under the terms of the agreement, eSoft's value-added resellers (VARs) can sell a bundled service package that includes a TEAM Internet system and fast Internet access via DSL provided by Covad.
16-Jul-99 09:25 ET
Covad Communications (COVD) 67 1/2: CS First Boston initiates coverage of high-speed digital communications services provider with a "buy" rating. Stock indicated 1/4 lower, following 9 1/4 pt advance yesterday.
15-Jul-99 14:49 ET
Late Session Movers (OPENX) : Covad Communications (COVD 67 +8 3/4), intraday range 59 1/16 to 68 1/8. Volume 1.6 mln. Company is a provider of high-speed digital communications services using Digital Subscriber Line technology.
30-Jun-99 08:59 ET
Covad Communications (COVD) 41 3/8: Company and MindSpring Enterprises (MSPG) announce plans to introduce a consumer Asymmetric Digital Subscriber Line (aDSL) service to select markets in California and Texas this fall. Separately, Morgan Stanley Dean Witter starts coverage of high-speed Internet access provider with an "outperform" rating. COVD bid up 1 5/8 in pre-market.
24-Jun-99 09:58 ET
Covad Communications Group (COVD) 43 +1 5/16 (+3%): Deutsche Banc Alex. Brown starts coverage of issue with a "buy" rating. This morning, COVD announced availability of its Digital Subscriber Line (DSL)-based services in the Minneapolis/St. Paul area.
22-Jun-99 11:39 ET
Covad Communications (COVD) 45 3/4 -1/2 (-1%): BancofAmerica Securities starts coverage of high-speed Internet access provider with "buy" rating and $55 price target. Volume 814K; intraday range 44 9/16 to 47.
21-Jun-99 15:57 ET
Covad Communications (COVD) 46 3/8 +1 1/2 (+3%): Internet services provider MindSpring Enterprises (MSGP) signs agreement making Covad preferred provider of digital subscriber line (DSL) services to business customers nationwide.
18-Jun-99 15:02 ET
Covad Communications Group (COVD) 43 1/8 +3 9/16: Shares of Competitive Local Exchange Carrier (CLEC), offering high-speed digital communications services, trading up 9% on the session after being started with a "buy" rating at DLJ. Firm set 12-month target of $54. DLJ was co-manager of 7.5 mln secondary offering completed today, as well as co-manager of company's late-January initial public offering, which priced at $18. Intraday range 38 3/4 to 43 5/8.
20-May-99 10:18 ET
Healtheon (HLTH)/WebMD : List of companies that have announced investments or strategic alliances with Healtheon/WebMD: Microsoft, Excite, Covad Communications (COVD), Superior Consultant Holdings (SUPC).
20-May-99 09:24 ET
Covad Communications Group (COVD) 62 15/16: High-speed Internet and network access provider files to sell 7.5 mln shares in a secondary offering. Shares being sold by stockholders. Filing comes only four months after company's IPO, which priced at $18 per share. Based on stock's current price, COVD holders taking almost one-half billion dollars off the table. Company had revenue of only $5.3 mln in 1998.
19-May-99 09:22 ET
Covad Communications (COVD) 91 7/8: Issue to begin trading on post-split basis this morning. COVD announced 3-for-2 stock split on April 23.
23-Apr-99 09:18 ET
Covad Communications Group (COVD) 97 1/4: Provider of digital subscriber line (DSL) technology plans to sell 5 million shares in a secondary offering. Shares being sold primarily by holders of the company's warrants. Shareholders certainly wasting no time taking money off the table -- Covad went public just three months ago, in an IPO priced at $18. Stock has risen 440% and is indicated another 7 points higher this morning. Early strength based on news company also plans to split its stock 3-for-2.
12-Apr-99 09:10 ET
Covad Communications (COVD) 81 1/2: Company completes agreement to offer DSL services through Internet access provider PSINet Inc (PSIX 52 1/8). COVD indicated 1 point lower, PSIX 1/4 lower. Separately, COVD's CEO will be interviewed on CNBC this morning. (Press Release)
29-Mar-99 11:28 ET
Covad Communications (COVD) 69 3/16 +4 13/16 (+7%): --Update-- Issue makes new intraday high. This morning, COVD announced nationwide DSL network via backbone agreements with AT&T and Qwest Communications. Volume 226K; intraday range 65 to 69 3/16; float 7.8 mln.
29-Mar-99 09:30 ET
Covad Communications (COVD) 66 5/8 +2 1/4 (+4%) Company delivers first nationwide DSL network via backbone agreements with AT&T and Qwest Communications.
Story Stocks
08-Dec-99 15:32 ET
Nextlink Communications (NXLK) 63 1/8 +7 1/4: Holders of this telecommunications company have enjoyed a 340% rise in share price year-to-date and the stock continues to show no signs of letting up. Today's good news was an $850 mln investment from privately-held Forstmann Little & Co. in exchange for an eight percent stake in the company. Nextlink differentiates itself from other telecom companies by virtue of its diverse product offerings. The company began in 1994 as one of the first competitive local exchange carriers (CLECs) to provide services over its own fiber-optic network. Nextlink has since expanded their product offerings to wireless allowing them to offer their customers a full range of local and long distance voice as well as broadband data and IP-based services in 48 US markets. Of the 15 firms that cover the stock, there doesn't seem to be an analyst on the Street that doesn't have some version of a buy rating on the stock, spare Jefferies & Co. and First Union's analysts who downgraded the stock due to valuation as the issue blew through their target prices and continue to rise. PaineWebber calls the stock the best long-term investment in its industry, and DLJ calls today's news more evidence that the stock represents a core holding in the CLEC space. Nextlink founder Craig McCaw, who sold McCaw Cellular to AT&T (T) in 1994 for $11.5 bln, has a blanket strategy in mind for Nextlink. The company is the largest holder of broadband fixed-wireless spectrum in North America and through their investment in Covad Communications (COVD), has a foot-in-the-door to the DSL market. McCaw envisions offering his customers fiber-optic, wireless, and satellite communications services all through one provider and conveniently on one bill. Nextlink is still showing large operating losses (FY00 consensus est. is a loss of $4.94/share), but their last three quarters have shown significantly narrower losses than Street estimates on strong revenue growth. The stock might see some near-term profit taking, but long-run, we don't see the end to this ride. -MG
26-Jul-99 13:25 ET
Earnings Preview : The trend is your friend. As Briefing.com discussed in July 16 "Daytrader" column, one of the major momentum themes over the past several weeks has been the blow-out earnings play. Investors/traders have poured into stocks following release of over-the-top quarterly results. Obviously, not all issues soaring post-earnings. The shared link has been better-than-expected EPS; the issue happened to be trading within striking distance of 52-week high; and the company is involved in the technology field, preferably with some connection to the Internet. In hopes of uncovering the next Harmonic (HLIT), which soared 14 1/2 over the two days following its report, or Copper Mountain Networks (CMTN), which has vaulted 24 pts since Friday, Briefing.com previews the companies scheduled to release results today after-the-close of trading. The issues highlighted are the only ones trading with "striking distance" of 52-week high... Investors already positioning themselves in shares of JDS Uniphase (JDSU 160 1/8 +3 1/16) ahead of company's earnings report this evening. The semiconductor equipment maker is expected to announce a fiscal Q4 profit of $0.44 a share, compared to yr-ago EPS of $0.45... Estimates range from $0.42-$0.46... 52-Week range 31 1/4 to 177 7/16... Remedy Corp (RMDY 26 1/2 -3/4) is a developer of client/server and web-based application software for customer relationship management and employee workplace automation.... The stock has rallied 93% on a year-to-date basis and currently trades within 2 1/2 pts of its 52-week high. In the previous qtr, RMDY exceeded Wall Street earnings estimates by 22%... But should be noted that company also has a history of missing its number. RMDY has come up short at least twice over the past six quarters... While neither of these companies has the type of earnings history or stock market visibility that would warrant speculation ahead of numbers, the stocks may, nevertheless, be worth eyeing tomorrow should results come in well above Wall Street consensus... Other notable tech names scheduled to release after-the-close include: eBay (EBAY), Covad Communications (COVD) and Mail.com (MAIL). - DS
30-Jun-99 14:11 ET
(Daytrader) : Price action today in Copper Mountain Networks (CMTN 74 1/2 +5 5/8) and Covad Communications (COVD 46 +4 5/8) suggests that the time has come to revisit the broadband Internet access companies; specifically the providers of Digital Subscriber Line (DSL) services... Copper Mountain Networks (CMTN) shares have been carried to a new all-time high today on no news, while Covad benefitting from announcement of roll-out of consumer Asymmetric Digital Subscriber Line (aDSL) in select markets in California and Texas. The company will team with Internet service provider MindSpring Enterprises (MSPG) to offer the service (see press release)... As Briefing.com has discussed in previous reports, the term broadband has replaced e-commerce as the Internet community's latest buzz-term. Over the past several sessions, the market's infatuation with broadband infrastructure has launched several networking equipment stocks (see yesterday's "Daytrader" column for details). Just in case some of this momentum flows over to the access stocks, Briefing.com takes a closer look at the leading names in this group. Should be noted that several of these companies have only recently launched, which would account for Herculean yr/yr growth rates and, to a certain degree, the seemingly bloated P/S multiples. - DS
Stock IPO Price Market-Cap Q1 Revenue (yr/yr change) Price/Sales Ratio Price Range Since IPO
Copper Mountain Networks (CMTN) $21 $1.7 bln $13.2 mln (4100%) 49 $50 1/2-78 3/8
Covad Communications (COVD) $18 $3.7 bln $5.6 mln (2900%) 348 $20 5/8-81
Tut Systems (TUTS) $18 $482 mln $3.9 mln (109%) 39 $36 5/8-86 1/4
Rhythms NetConnections (RTHM) $21 $3.6 bln $0.5 mln (n/a) 7200 $42 1/2-111 1/2
NorthPoint Communications (NPNT) $24 $4.3 bln $0.93 mln (n/a) 4623 $30-48 3/4
23-Jun-99 16:19 ET
GlobeSpan Inc (GSPN) 42 5/16 +27 5/16: Investors continue to move down stream to participate in the recent boom in digital subscriber line (DSL) technology companies. The explosion in these stocks began in January when high-speed Internet access companies Covad Communications (COVD) and Tut Systems (TUTS) made their stock market debuts. The positive momentum flowed over to shares of infrastructure companies such as Redback Networks (RBAK) when its IPO hit the market a couple of months later. On average, these three stocks have soared 204% from their IPO prices... Shares of Red Bank, NJ-based GlobeSpan rose 182% on their first day of trading, on volume of almost 9 million shares. The stock opened for trading at $26 3/8 and reached an intraday high of $43 1/8... GSPN designs digital subscriber line (DSL) chip sets which enable high-speed data transmission over copper telephone lines. The company was formed in 1996 as part of the divestiture of AT&T Paradyne Corp by Lucent Technologies (LU). In 1998, Cisco Systems (CSCO) was GlobeSpan's biggest customer, accounting for 48% of the company's total top-line... Given the stock's incredible first day run, one would think that GSPN were bulletproof. But a look at the company's financials quickly reveals a glaring weakness: sluggish revenue growth. In the most recent qtr, GSPN's revenue expanded at a 14% clip -- hardly what we would call robust... But given stock is being bid up by traders and momentum players, the company's lackluster growth is simply not an issue; at least for now... Potential secondary plays to this stock include Analog Devices (ADI), Conexant Systems (CNXT) and Level One Communications (LEVL). - DS
03-Jun-99 15:25 ET
NETWORK ACCESS (NASC) : The extremely successful IPOs of Covad Communications (COVD) and Tuts Systems (TUTS) in January pryed open the floodgates for offerings from the high-speed Internet access space, particularly for those companies employing digital subscriber line (DSL) technology. COVD and TUTS were followed through the IPO pipeline by Rhythms NetConnections (RTHM), Copper Mountain Networks (CMTN), NorthPoint Communications (NPNT), all of which blew the doors off on their first day of trading. But while the others have pursued a network access strategy from the beginning, NASC has decided only recently to enter this market. Before its move into high speed data transmission services in January, the company was focused on providing telecommunications products and consulting services. While it is still early in the process, initial results have been far from compelling. In the first quarter of 1999, network services revenues came in at just $119,000, or about 2.5% of total revenues, vs approximately 83% from product sales and 15% from consulting services... Financials: In 1998, the NASC's revenue grew 30% to $11.64 mln. The company followed a profitable 1997 (earnings $42,000) with a $2.1 million loss in 1998. In the first three months of this year, NASC lost $2.5 million, on revenue of $4 mln. The Offering: The company is planning to sell 7.5 mln shares at $14-$16 each. Donaldson Lufkin Jenrette is serving as lead underwriter of the deal. Assuming a $16 pricing, company's market cap would exceed $700 million, resulting in a trailing Price/Sales ratio of approx. 52.
18-May-99 12:05 ET
REDBACK NETWORKS INC (RBAK): Traders preparing to pounce on the latest offering from the high-speed Internet access space. Last night, shares of Sunnyvale, CA-based, Redback Networks, priced at $23, well above the $18-$20 proposed range. But even after pricing at a substantial premium to the original range, RBAK shares carry a Price/Sales ratio of just 32 times trailing top-line, which would seem quite reasonable relative to recent DSL Internet access offerings such as Tut Systems (TUTS) and Covad Communications (COVD). Only one problem: RBAK is a backbone company, not a provider of broadband access. More appropriate comparables would be the approximately 17 times trailing sales that the market has awarded Cisco Systems (CSCO), the less than 3.5 times trailing sales that investors are currently paying for Nortel Networks (NT), or Lucent Technologies' (LU) trailing P/S of 4.9. However, it is very unlikely that valuation disparity will cause day traders to back away from this stock. In their minds, Redback is an Internet pure play. On the first day of trading, that's the only fundamental that matters... RBAK's networking systems enable carriers, cable operators and service providers to deploy high-speed access to the Internet and corporate networks. The systems reduce the processing requirements placed on routers connecting to the Internet backbone in broadband networks. RBAK's flagship product, Subscriber Management System (SMS) 1000, has been deployed by many of the nation's largest carriers and service providers, including UUNET, SBC, Southwestern Bell Information Systems, Pacific Bell Internet., Earthlink, and Verio... For the year ended December 31, RBAK reported a net loss of $9.9 million, on revenue of $9.2 million. The 2.5 million share offering is being led by Morgan Stanley Dean Witter.
17-May-99 11:55 ET
CAIS INTERNET INC. (CAIS): Initial public offering of commercial and residential high-speed Internet connections provider scheduled to be one of the first Net deals out the gate this week. Deal could price as early as tonight. CAIS Internet's OverVoice technology allows users to simultaneously transmit voice and data over a traditional copper telephone line at speeds of up to 175 times those of 56.6k dial-up modems. The company's digital subscriber line (DSL) service, HyperDSL, is offered in conjunction with Covad Communications Group (COVD) and Bell Atlantic (BEL). As of April 16, CAIS Internet had installed the OverVoice technology in over 1,900 apartment units, 15 multiple dwelling unit buildings and over 2,100 guest rooms in eight hotels. Company has contracts with 11 additional hotel properties to install OverVoice in more than 2,500 guest rooms. CAIS recently entered into a master agreement with Hilton, under which Hilton has licensed us the right to offer high-speed Internet access service in 225 Hilton-owned, managed or franchised hotels throughout the U.S... The Offering: CAIS Internet is planning to sell 6 million shares at $14-$16 each, in a deal led by Bear Stearns. Based on a pricing at the high-end of the proposed range, CAIS would sport a market-cap of $304 million and a trailing Price/Sales ratio of 57.2... Financials: While CAIS has signed several big deals over past year, based on company's modest revenue growth, it does not appear that revenue from those relationships has started to hit the top-line. For the year ended Dec. 31, CAIS reported revenue of $5.3 million, up just 17% from the year-ago period. During the same period, loss from continuing operations more than doubled, from $4.6 mln to $11.6 mln... The attached table displays price action of issues from the high-speed Internet space that have recently come public. So far this year, investors have been extremely bullish on offerings from this arena. On average, the stocks have opened 167% above IPO price and finished the first day of trading up 12% from opening level.
Stock IPO Price First Day Open First Day Close Current Price Price Range Since IPO
Covad Communications (COVD) $18 $40 1/2 $45 3/8 $82 3/8 $31 - $121 1/2
Tut Systems (TUTS) $18 $49 5/8 $57 1/2 $44 5/8 $38 - $86 1/4
Copper Mountain Networks (CMTN) $21 $63 $68 1/2 $59 1/4 $62 - $72 3/8
26-Apr-99 14:35 ET
Internet
Stock IPO Date IPO Price First Trade Current Price (% Change From Open Price)
United Pan-Europe Communications (UPCOY) Feb 12 $32 3/4 $43 $54 (+25.6%)
Rhythms NetConnections (RTHM) April 7 $21 $56 $84 (+50%)
ZDNet Group (ZDZ) March 31 $19 $35 3/4 $41 3/4 (+16.8%)
OneMain.com (ONEM) March 25 $22 $38 $33 3/8 (-12.2%)
priceline.com (PCLN) March 30 $16 $81 $113 (+39.5%)
Covad Communications (COVD) Jan 22 $18 $40.50 $112 (+177%)
07-Apr-99 12:25 ET
(DAYTRADER): The initial public offering of high-speed access networking solutions company, Rhythms Netconnections Inc. (RTHM 64 +23), is the first of the higher-profile Internet-related deals to hit the market this week. After pricing last night at $21 a share, the stock has rallied to an intra-session high of $70, a rise of 25% from where RTHM opened for trading. The strong first-day performance of RTHM is aiding the shares of recent initial public offerings Tut Systems (TUTS 52 1/2 +2 1/4) and Covad Communications (COVD 71 1/2 +3 1/16), both of which offer high-speed Internet access... Momentum Movers: Traders continue to bid up stocks in the streaming media space, following announced Yahoo! acquisition of Broadcast.com. Shares of RealNetworks (RNWK 211 +15 9/16) and audiohighway.com (AHWY 26 9/16 +9 3/16) are pacing the advance in the group. Management of similar companies quick to take notice of market's recent infatuation with the stocks. For example, MultiMedia Access Corp (MMAC 7 7/8 +7/16) announces today plans to change its name to ViewCast.com in order "to more accurately reflect the company's position in the Internet video streaming market." White Pine Software (WPNE 5 5/8 +1 11/16) making itself more visible by announcing the integration of streaming media technology into its MeetingPoint conference server. Internet IPOs: In the attached table, Briefing.com previews several of the Internet deals expected to hit the market this week.
Stock Industry Proposed Range 1998 Sales (Yr/Yr Change) Price/Sales Ratio* Lead Underwriter
Value America (VUSA) Online retailer $20-$22 $41.5 mln (31,000) 23 BB Robertson Stephens
iTurf (TURF) Internet community/e-commerce $16-$18 $4 mln (2900%) 75 BT Alex. Brown
Rhythms NetConnections (RTHM) Internet access provider $18-$20 (open for trading) 0.53 mln (n/a) 8520 Merrill Lynch
USinternetworking Inc (USIX) Provider of Internet-based access to software $11-$13 $8.5 mln (200%) 60 CS First Boston
Log on America (LOAX) ISP $10 $0.76 mln (117%) 87 Dirks & Co.
*based on high end of proposed range
26-Feb-99 12:35 ET
(DAYTRADER): In our continuing effort to keep our readers abreast of developing trends in the market, Briefing.com looks at the price action in the shares of several recent Internet-related initial public offerings. Each of the stocks listed came to market in 1999 and closed its initial day of trading above the stock's first day opening price (e.g. stock opened at $90 a share, and finished the first-day of trading at $97 3/4). The data on these particular stocks confirm Bri |
