FYI, here is the 'next' Marketwatch to be going public this year:
StockHouse.com is located at: stockhouse.com and their Australian site is at stockhouse.com.au
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news.com.au
Stockhouse joins local rush
By CLIVE MATHIESON
8feb99
SELF-MADE Internet entrepreneur Jeff Berwick admits there is something of a bubble building in Internet stocks worldwide. Not that he's complaining.
Since the Internet share boom last year, Mr Berwick has been deluged with phone calls from opportunistic brokers offering to float his online financial news service, many putting a value on the Canadian company of more than $100 million.
Stockhouse.com is one of a growing band of online outfits seeking to exploit the share market's hunger for anything even remotely connected to the Internet.
By the end of the year it could be listed on the Australian Stock Exchange.
David Willington, of Ernst & Young Corporate Finance, which is advising Stockhouse in Australia, says any potential listing would be devoured by investors in the prevailing climate.
"Given the current appetite for Internet and high technology stocks, a float by a company like Stockhouse.com would be well received by Australian investors," Mr Willington says.
Only last week, AAPT chief executive Larry Williams joked that his company, which is considering a new corporate identity, could adopt the name of its Internet subsidiary to better reflect the growth profile of its industry.
"Connect.com. How do you think that would go with the market?" he asked reporters.
Mr Berwick, 28, concedes the thirst for Internet stocks resembles previous share market bubbles and is vulnerable to a correction.
But in the event of a pullback in Net shares, he says the market will not be able to ignore the enormous potential of the online economy for long.
"There's a bubble for sure," he said during a recruitment drive in Australia. "But the excitement about the Internet stocks is really warranted. It's like the rebirth of television except better. If people can get pieces of that market it will be very profitable."
Mr Berwick founded Stockhouse.com in Canada three years ago, racking up a $100,000 bill on his credit card in the process. Today, the Stockhouse portal is the top financial site in Canada with about 100 million hits a month, including a growing 5 per cent from Australia.
Stockhouse gathers data on companies from around the world and provides links to sources such as wire services, newspapers, financial newsletters and brokers' reports.
But unlike some other financial news sites, Stockhouse has its own editorial staff following individual companies. It also has an open chat site – Bullboard – and is considering services such as online trading.
The group now has about 30 staff in Toronto and Sarasota in the US. Australia is its first overseas destination in an expansion program six months in the making.
Tom Johnson, who will run the local operation, says the company is seeking one or two editorial staff in Australia and one or two sales and marketing people to promote the site and sell advertising – its main revenue earner. Initially based in Sydney, Stockhouse will consider a Perth office given the mutual interest in Australia and Canada in resource stocks.
The growth of Stockhouse, which has coincided with the surge of interest in Internet stocks, has attracted the attention of investment banks. Mr Berwick says brokers are lining up to float the company.
The closest listed comparison to Stockhouse is Marketwatch.com – a financial news site 38 per cent owned by the giant CBS television network in the US. The stock leapt fivefold on its first day of trading last month and is still tracking four times above its $US17 issue price. A company with revenue of just $US2 million ($3 billion) in the September quarter is now worth $US818 million.
Stockhouse.com is growing exponentially, with revenues rising from $150,000 in 1996 to more than $1 million last year.
If it wasn't growing so fast, the company could be profitable now. But in today's heated market, investors don't care about profits; they want growth.
Stockhouse has already done a private placement to a strategic investor to raise $1 million. A San Francisco investment firm is currently conducting a $6 million placement, which values the company at about $30 million, ahead of listing on the technology-laden Nasdaq market this year.
An initial public offer in the next six to 12 months will coincide with joint listings on other share markets, including the ASX.
Even if investors get burned during this bubble, Mr Berwick says the Internet will ultimately be a force of good for investment markets.
"If anything, we are seeing a major growth in the amount of market savvy and knowledge in the investment public," he told online service CNET.
"The more market-related information that is freely available on the Net, the more the markets will prosper as they will have more liquidity and more interest."
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