Elliot, So the Barrons article is not all bad huh? Let me run down the highlights and perhaps you can present your points and counterpoints?
1. UBid Online Auction's IPO will be a screamer. It's a small deal in the hot Internet sector led by a top underwriter -- and that translates into a resounding opening premium.
I guess everybody agrees with opening statement.
2. UBid isn't another eBay. Unlike eBay, it has no profits and faces stiff competition. EBay links individual buyers and sellers and holds no inventory. But uBid acts as a clearance house for a range of computer and high-tech vendors
3. EBay's early success acts as a barrier to entry, and it has no major competitors. But uBid operates in a crowded field and faces direct competition from OnSale, Z-Auction and First Auction. Others like Internet Shopping Network, AOL and Cendant specialize in electronic commerce or derive a portion of their revenues from it. In addition, some PC manufacturers offer clearance prices on old models, and there are scads of catalogue retailers with Websites.
4. Along came theglobe.com, a so-so company that priced its deal at $9 a share via Bear Stearns. It opened November 13 at 90, peaked at 97, dipped to 32 1/16 and recently fetched 40 7/8 .
5. UBid plays into the continued clamor for Internet IPOs. Traders can make money, but individual investors might be well-advised to stay out of uBid for at least two earnings periods. Let the stock settle and check revenue growth before jumping in.
6. UBid's IPO will pop on the opening, but that pop won't be for thee. However, the bell will toll for the greater fool who buys uBid's shares at ridiculously high levels in the aftermarket, holds them and rides the price down to something beginning to resemble reality. |
