My gosh more acronyms<G>
"October 6, 2000
Dow Jones Newswires
VerticalNet CEO: Excited About Co.'s Prospects
Dow Jones Newswires
By Dinah Wisenberg Brin
Of DOW JONES NEWSWIRES
PHILADELPHIA -- VerticalNet Inc. (VERT) President and Chief Executive Joe
Galli gave a bullish outlook on his business-to-business e-commerce company
Friday, including announcing four new products, after a stormy trading session in
which the stock slid 24% to a 52-week low.
Galli arranged an after-hours conference call for reporters and analysts after
Wedbush Morgan Securities issued a negative report that apparently helped drive
the selloff. Wedbush cut its 12-month price target to $30 from $50 and slashed its
2002 and 2003 earnings projections on VerticalNet.
"I couldn't be more excited about our future prospects and about the momentum
this company is building," said Galli, who joined VerticalNet eight weeks ago after
a stint as Amazon.com Inc.'s (AMZN) president and chief operating officer.
Galli said he looks forward to third-quarter results, to be released Oct. 24, and to
those of other quarters.
"This company is on fire and has a very talented team" that's focused on
achieving "outstanding results" in future quarters, he said. He cited a recently
hired stable of "world class executives."
VerticalNet, of Horsham, Pa., considered a pioneer in B2B e-commerce, this week
unveiled for its sales force four new products it officially starts selling next week,
including enhancements to its e-commerce center offering, Galli said. Some people
already have made sales, he said.
VerticalNet Chief Operating Officer Mike Hagan said the company is "moving
into a whole suite of products" that will enable VerticalNet to increase sales to
customers in its 57 online trading communities.
Many see VerticalNet as only an online exchange, Galli said, but he now calls the
company a "B2B e-commerce enabler," or B2BECE. "We enable companies to
move activities from offline to online," the CEO said.
Galli also announced, one business day head of schedule, that he has tapped as
vice president of marketing Rory Leyden, with whom he worked at Black &
Decker Corp. (BDK). Generating customer traffic on the VerticalNet site will be
his top priority, Galli said.
"I believe traffic will be the strength of this company," Galli said.
The traffic comment touched on a key concern of Wedbush analysts, who wrote
that light traffic is leading to dissatisfaction for VerticalNet's eCommerce center
customers and compromising prospects that they and storefront clients will renew
their VerticalNet business. The storefront clients get their first year for free.
Wedbush rates the stock a hold. A First Call/Thomson Financial consensus of 28
analysts rates the stock a buy, and a Prudential Securities analyst said Friday it's
too soon to draw conclusions about VerticalNet's new storefronts and
e-commerce centers.
"There are six other analysts that have studied our company backwards and
forwards that have come out with strong-buy recommendations, that have come
up with a different point of view," Galli said.
"Our point of view is that things couldn't be going better and I'm incredibly
excited by what I see here at VerticalNet," he said.
The stock closed Friday at $21.75, down $6.81, or 23.9%, on volume of 9.8
million, compared with average daily volume of 2.9 million shares. Earlier it hit
$21, breaking the previous 52-week low of $22 set one year ago.
In its negative note, Wedbush predicted VerticalNet would get only a 50%
renewal rate on its eventual 80,000 online business storefronts once the free year
expires. Microsoft Corp. (MSFT) is paying VerticalNet to host the storefronts for
a year.
But Galli, while not disclosing the company's renewal predictions, said a 50% rate
would allow VerticalNet to meet its financial targets. He also said the company
wants to enlarge some of its clients' storefronts into larger e-commerce
commitments.
The new products to be rolled out next week are an already announced, upgraded
storefront product that's e-commerce enabled, as well as three new items. They
are an e-Commerce center expansion that allows for a type of private label
operation, a partner-locator service, and a customer-pricing product.
All are stand-alone products that can be bundled in different ways.
Wedbush analyst George Santana, who spoke at length with Galli on Friday, said
he heard nothing that would change his report. But he also said he's not entirely
bearish on VerticalNet.
"If they execute well, then there's value to the company," he said. "The company
is worth something and if the stock continues to go down as it did today, maybe
there's a point in there where we say, 'Well, the battle's won, maybe we're at a fair
value."
Santana said: "We're not saying this is a zero."
-Dinah Wisenberg Brin, Dow Jones Newswires,215-656-8285
dinah.brin@dowjones.com" |
