H James Morris: We are still in the first inning of content delivery build-out. Most Web infrastructures are still being built and expanded. Yes, AKAM and ISLD have early lead. We are waiting for the first phase of Mirror-Image CAP network to be deployed and customers come on-board. This is what the investment is about. There is risk. IMHO a risk well taken. Being aligned with EXDS minimizes the risk factor. Of course some new technology or company can came by and blow everyone away. It is possible.
The Street can bet all they want now. Let's see what happens in the next 6 months. IMO there will be many content delivery winners not just the three mentioned here. The stock prices have behaved like Mexican jumping beans because of the speculative nature. ISLD went from 18 to 150 in Dec 99, AKAM had a high of 345 and XLA a high of 112
You should note the difference between the three. ISLD is more like an EXDS. They provide data center infrastructure along with content delivery. Note, they bought Sand Piper just before/after AKAM went IPO, Oct 99, for about $600 million in stock. I felt that was strange because Sand Piper at that time seemed to be close or ahead of AKAM. EXDS which is data center infrastructure purchased 15% of Mirror Image for $637 million in Mar 00. So in one sense ISLD/Sandpiper is like EXDS/Mirror Image. But it appears that Mirror Image has loftier goals. IMHO a more significant investment by EXDS in Mirror Image is a possibility in the future, if the technology proves itself. AKAM is pure content delivery they make deals with data center/bandwidth companies to house their servers. Time will tell which strategy is successful.
It is not a bad strategy to purchase a bushel of stocks in new segment. This is called hedging ones bet. A basket of AKAM, EXDS, ISLD, XLA is not bad for a Long-term investor. Couple of years ago when networking was still in the early stages, I bought CSCO, CS and Synoptics ( which become BAY and now NT), during a market correction in 1994. I still have all three and a BIG grin on my face. One became the 800 lb gorilla we all dream of, one is a dog, and one is a nice investment.
Just some food for thought. Kinda similar to spring 2000. I am sure some us of will look back and say ?Boy I coulda XXXX for such a ridiculous price?
Good Luck Investing |
