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Technology Stocks : CMGI What is the latest news on this stock?
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To: Don Jeanblanc who wrote ()2/17/2000 9:11:00 AM
From: James Thompson  Read Replies (2) of 19700
 
OT-Pacific Century Cyberworks, The Chinese Dragon?

by Steve Harmon______________________

The Chinese celebrated the New Year a few weeks ago and it is the Year of the Golden Dragon. Investors began playing that idea (at least of a dragon) in the Internet space recently with Hong Kong's CMGI meets wanna-be broadband Web giant in the making Pacific Century Cyberworks (1186.HK).

The stock -- 1186 (numbered which is how stocks are known in Hong Kong; also known as PCCW) -- has literally gone from being a few pennies a share to a few dollars (Hong Kong). In U.S. dollars PacCentury commands a $30 billion market cap, on par with its U.S. counterpart CMGI (CMGI).

Now if it weren't for the past success of the founder and chairman, Richard Li, the valuation would seem out of whack with conventional metrics. Some of the expectation comes from Pac Century's share swaps for stakes in other Internet ventures such as 3.4% of CMGI (mentioned above). More recently a 20% stake in Hikari Tsushin.

The firm has 8.816 billion shares outstanding, which is exponentially many more times the number of shares you'll find in any U.S. company.

CMGI exchanged stock for stock $350 million worth last September which sent shares up a bit.

Before that Intel bought a double-digit stake which now sits at about 13.5%. Intel bought it for about $50 million.

Pacific Century's goal is to build out a broadband Internet access platform in Asia. Li built and sold satellite TV provider Star to News Corp. a few years back for $1 billion. So he's not new to launching ventures.

In many ways the broadband Internet idea echoes the strategy plays to Li's experience of TV delivery via satellite, serving Asian cities from the air rather than from national telecom infrastructures. Only different this time seems to be what the bird transmits.

In addition Pac Century has an exclusive with the Hong Kong government to build out a Cyber-Port (a high-tech center for Hong Kong).

Cyper-Port to me is the equivalent of owning pastureland in Silicon Valley before Fairchild Semiconductor spawned the tech mecca for the world.

At $30 billion is there any upside left for investors? In the last six months Pac Century's venture investments have gained $1.5 billion.

Ultimately the value of Pacific Century is if it can indeed become a platform for broadband content and commerce into Asia.

It may take some time before Pac Century grows into the expectation and I expect we may see Softbank coming soon to China. Or is Pac Century the Softbank of China? Time and execution will tell.
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