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Technology Stocks : InfoSpace (INSP): Where GNET went! -- Ignore unavailable to you. Want to Upgrade?

To: Adam S who wrote (8303)	6/24/1999 12:28:00 PM
From: Sarkie	Respond to of 28311

Adam....You are right...great article. I'm copying it here to keep it part of GNET history. HOW DID IT DOUBLE? In tennis, players who frequently rush the net to press an advantage eventually get the ball slammed down their throats. Niche Internet portal Go2Net (Nasdaq:GNET - news) stockholders know the feeling. Despite its perils, though, rushing the Net sometimes makes cents -- or maybe even $100 bills. After drifting down to $6 1/2 per share last September amidst the market turmoil, Go2Net stock doubled. Then it doubled again. And again. And again. Going to Go2Net was working big time for investors, with the score "Love-30" (baggers, that is). Thanks to profitable Q2 earnings, the stock topped out at $199 per share in April before the end of the spring Net rally sent investors running for cover. Although Go2Net has had a deuce of a time the last two months, it's still a nifty ten-bagger since fellow Fool Rick Munarriz wrote an analysis of the company last August. Go2Net's multiple rallies benefited from euphoric Internet fans, but the stock's swift moves followed a number of sweet deals. In early January, for instance, the company acquired Web21, a firm that attracts more than a million unique surfers per month to its 100hot.com ranking of the Net's top sites. "Fandemonium" really set in after Paul Allen, the billionaire co-founder of Microsoft (Nasdaq:MSFT - news) and major "Wired World" investor, announced that his Vulcan Ventures would acquire $300 million worth of Go2Net convertible preferred stock. Allen also said he would buy 1.4 million shares of common stock from Go2Net's officers and directors while launching a tender offer for another 3.6 million shares at $90 apiece to gain majority control of the firm. The stock had closed the previous business day at $87. Investors smashed that lob for a quick 30% one-day gain, figuring Go2Net might be more valuable than they thought now that Allen was on board. With such powerful topspin and a strong earnings report on April 22, Go2Net soon hit its all-time high. BUSINESS DESCRIPTION Formed late in 1996 by now 32-year-old CEO Russell Horowitz and president John Keister, Go2Net has been public since 1997. The Seattle-based company runs a network of websites focused on personal finance (Silicon Investor and StockSite), search (MetaCrawler), commerce (HyperMart and WebMarket), auctions (Haggle Online), and games (PlaySite). A year ago, Go2Net stood at #77 on Media Metrix's (Nasdaq:MMXI - news) parade of most-visited websites. From January to April, it rose from #24 to #19. Its reach increased by 11% between March and April, a period when other portals saw actual dips in traffic. It now reaches 36% of Web users. The company has grown through constant stock-for-stock acquisitions. In late April, it bought Virtual Avenue for $23 million in stock, considerably beefing up its HyperMart business, which offers free Web-hosting services for small- and medium-size businesses. HyperMart now claims more than 235,000 members and is adding 1,000 new members each day. In May, Go2Net traded $20 million of its stock for IQC.com, which offers advanced, Java-based real-time stock charting services. Some parts of IQC will be worked into Go2Net's other financial sites, while IQC's most advanced package will remain available via monthly subscription. After Vulcan's initial $167 million preferred investment, insiders owned 4.33 million shares or 27% of the stock, while Vulcan controlled another 16%. Following the June 17 shareowner approval of Vulcan's purchase of another $133 million in convertible preferred and the 1.4 million shares sold to Allen by insiders (36% of their holdings), Vulcan now controls 34% of the company. FINANCIAL FACTS Income Statement* 12-month sales: $9.1 million 12-month income: $0.62 million 12-month EPS: ($0.05) Profit Margin: 6.8% Market Cap: $2,439.7 million (Based on 16.71 million shares) (Pro forma, excluding acquisition charges and one-time non-cash dividend payment related to Vulcan Ventures' investment. Fully diluted shares include Vulcan's initial $167 million investment only. The loss per share reflects fewer shares outstanding during FY98 losses and more during FY99 gains.) Balance Sheet Cash: $179.2 million Current Assets: $177.7 million Current Liabilities: $3.5 million Long-Term Debt: None (*Cash includes $5 million in long-term investments, but only the initial Vulcan investment of $167 million. Including the second tranche, the company has roughly $312 million in cash.) Ratios Price-to-earnings: N/A Price-to-sales: 268.1