NEWS IHWY ___________________________________________________________________________
INTERNET STOCK NEWS (TM)
internetstocknews.com
Insight For The Intelligent Internet Investor
July 2, 1999
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Table of Contents:
1. Information-Highway.com Gets Added To Our “Ones to Watch in 1999!”
2. ISN Outlook & Exciting ISN Updates!
3. Random Internet Stock & Internet IPO Musings
4. ISN Events
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1. INFORMATION-HIGHWAY.COM (OTC BB: IHWY) ADDED TO THE ISN “ONES TO WATCH
IN 1999”
Today, we have added Information-Highway.com (OTC BB: IHWY) to our “Ones to
Watch in 1999” group of Internet companies. As you probably know, our
“Ones to Watch” group is up over 200% year-to-date and contains companies
which we feel to be leaders within their respective Internet sectors. The
group already contains Excite@Home, CMGI, mPhase Technologies, DoubleClick,
FreeRealTime.com, Starnet Communications, E*Trade, and SportsLine USA.
In our recent trip to Canada, one observation we made about the Canadian
ISP sector was that the sector has yet to diversify into a group of clear
leaders and laggards. We met up with Internet Direct, the largest
independent ISP in Canada, and Information-Highway.com and were very
impressed by both. Internet Direct is currently only traded on the
Vancover Stock Exchange under the symbol IDX, but expects a Nasdaq listing
soon. Information-Highway.com, on the other hand, shares the same goals of
a Nasdaq listing in the future but is already quoted through the OTC
Bulletin Board under the symbol IHWY.
Our reasoning for the addition is as fairly simple. We'll try to explain
it so you can understand it.
We have always viewed the Internet Access business as a way to build market
share. Once an ISP generates a new subscriber, they can generate far more
revenue from marketing portal services, e-commerce, and Internet-based
telephone calls to their subscriber than from merely charging the
individual monthly $19.95 dial-up charges. In the long-term, large
aggressive virtual ISP's like America Online which control their users'
viewing of content can possibly become a virtual conglomeration of your
local cable company, Internet access company, TV broadcast networks, and
phone company if they build a significant amount of market share.
This is Information-Highway.com's goal. Keep in mind that this is not an
easy goal to achieve. The company will need to flawlessy integrate
voice-over-IP telephony into a portal system which contains a wealth of
pages from which they generate advertising. In addition, the company will
have to partner with brand-name e-tailers and provide proprietary content
in order to fulfill a user's every need.
In our last trip to the company's headquarters in Richmond, we were given a
feel for the company's direction and were impressed by their recent actions
toward achieving their goals. Operated as a group of ISP's in Canada and
virtual ISP's in the United States, the company showed us their plans for
building new portal sites to be launched within the upcoming months as well
as IP Telephony marketing plans in order to market their portal division.
Information-Highway.com also shared with us plans to expand their portal
division signifcantly with the addition of datafeeds and new content on
their ExecutiveClub web sites.
We tested Information-Highway.com's IP Telephony system and were excited to
find it working flawlessly. Information-Highway.com plans to us its IP
Telephony technology as a marketing tool to generate more portal users to
build market share. With the company's recent partnerships with
Broadcast.com and Level 3 Communications, it seems that
Information-Highway.com may finally be positioned to take advantage of the
U.S.-based Virtual ISP market.
The company now has virtual ISP's in Dallas, Houston and Seattle as well as
traditional ISP's in Richmond and Toronto. They are also planning to
launch portal sites in these cities and roll out Virtual ISP service as
well as portal sites in cities and states including Philadelphia, Boston,
Los Angeles, San Diego, San Jose, New York, Chicago, Orlando, Detroit,
Washington, D.C., Atlanta, Baltimore, Denver and Miami before the end of
1999.
As the company expects to raise capital for virutal ISP expansion as well
as for ISP acquisitions in the near future, we would not be surprised to
see Information-Highway.com to meet their goals.
And so, we wish them the best of luck in becoming a leading diversified
multi-national ISP by adding them on to our “Ones to Watch in 1999” group
of Internet companies.
For those interested in Information-Highway.com, check out the company at
information-highway.com and check out their Executive Club
portal site at theexecutive.com.
2. ISN OUTLOOK & UPDATES
This week, we have published a shortened version of ISN as our Senior
Analyst, Ted Kunzog, is on vacation and as we are moving offices. We will
give you an updated version of all the latest Internet Stock News early
next week so check your e-mail!
It has been a busy week for Internet stocks and the general markets.
Earlier this week we predicted a 25 basis point increase in interest rates
with no market reaction and whoila!, it happened.
While we predicted a fast recovery for Tier 1 Internet stocks such as CMGI,
DoubleClick, and others, investors proved us wrong as they returned right
back to there speculative habits and ran Tier 2 Internet stocks such as
24/7 Media, NetGravity, Silknet, and Go2Net up some 20% after the Fed's
announcement.
As for our specific predictions for Internet stock movement last week, this
time we were right on the money. After experiencing a bit of a
psychological price barrier at $20 per share, Starnet Communications (OTC
BB: SNMM) pulled back a bit only to head upwards once again after
announcing an agreement for one of its subsidiaries to simulcast races at
Bally's via the Internet. We think that this is only the start for
Starnet's horseracing simulcast business. As bandwith constraints die down
Starnet's business should pick up. They are already known as the leader in
their industry and we expect the company to continue to be able to make
agreements to provide simulcast horseracing and betting via the Internet
with large traditional partner companies. Watch out Youbet! (NASDAQ:
UBET).
As for our prediction for Wit Capital (NASDAQ: WITC), we didn't expect to
be as right as we were, but we will take the credit. We told you that the
company's stock chart suggested that the stock was moving higher at
approximately $30 per share on Monday and, on Tuesday, the stock hit a high
of $38 per share. We made a pretty penny and hope you did too!
If you don't understand how we predicted this, buy the book, “How to Make
Money on Stocks” by William J. O'Neill from our web site. It is fun and
easy reading and costs about $10. After all, just like Vidal Sasoon says,
“If you don't look good, we don't look good.”
As for our prediction about mPhase Technologies (OTC BB: XDSL) for the
price trend to be higher, we could have been right but we will never know.
The mPhase stock has recently escalated to near $10 after they announced a
$10 million cash infusion from a private placement stock offering,
clearance by the SEC to become fully reporting, and their goal of seeking a
NASDAQ listing. The company is now able to move forward without funding
contraints and it seems that investors are becoming very excited about this
stock as the company may move to the Nasdaq exchange in the near future.
You may view the company's news at biz.yahoo.com
Do any of you remember SoftTek Technologies, Inc.? SoftTek is one of our
featured companies which we allowed you to become involved in via a Direct
Public Offering at $2.50 per share. A leading provider of
business-to-business Internet Fax Solutions, SoftTek has recently made some
exciting news. First of all, the company has changed their name to
VillageFax.com, villagefax.com . We like it! The web site is
not completed yet but we think their new name is better suited to compete
with companies such as Efax.com, Jfax.com, and others. At the company's
shareholder meeting last week, VillageFax.com announced a 1000% increase in
volume do to new strategic partners. The company also moved to a larger
office in Tustin , California. We're excited about this company and can't
wait till they start trading! Check out their latest news:
investor.msn.com
As for the general markets, we expect a strong move upward in the near
future. The Fed funds rate increase is now out of the way and, later this
week, after the NAPM and jobs data is releases, we expect institutional and
retail investors to listen to media hype and create the self-fulfiling
prophecy of a short-term bull market. Our favorites are CMGI, DoubleClick,
Inktomi, and Real Networks, as well as some of the smaller brand name IPO's
and Internet companies such as SilkNet, Xoom.com, Infospace.com, Wit
Capital, and Digital River. As for the small and microcap Internets, we
continue to follow mPhase Technologies (XDSL), Starnet (SNMM), billserv.com
(BLLS), and Information-Highway.com (IHWY) closely.
Best of luck with all of your invetments and have a fun 4th of July!
-ISN
Top Stories This Week:
Compaq, CMGI cement Alta Vista Deal
dailynews.yahoo.com
iVillage agrees to acquire mental health site Online Psych for $25 million
biz.yahoo.com
CMGI closes $375 million Private Placement
biz.yahoo.com
AOL, Prodigy Offer Free Computers
dailynews.yahoo.com
Women.com Networks to offer 3.75 mln IPO shares
biz.yahoo.com
3. RANDOM INTERNET STOCK MUSINGS
By Mike Ogburn
The Feds' expected rate increase and unexpected bias change (to neutral)
sparked a market rally. Perhaps the biggest gainers were the recent
Internet IPOs, who've been swimming upstream against a lukewarm IPO
climate. The top recent issue (and one of the few that hasn't struggled) –
Juniper Communications – tagged on more than 33 points Wednesday to close
at 149. Remember, this IPO frenzy is a double-edged sword: short-term, it
brings money and enthusiasm to the sector; long-term, it continues to flood
the market with over-capped/under-planned companies, which in turn dilute
the overall demand for Net stocks…
Jack Welch of General Electric recently stated that the top five priorities
for GE were to get all of its businesses to increase value and service by
utilizing the Internet (and he listed this as priority 1 through 5). Maybe
Welch could start with his NBC subsidiary CNBC, a network of Net
troglodytes whose on-screen personalities embrace the industry like it's
the plague. These “journalist” just don't get it, and their smirks,
negative comments and biased interviews reveal a deep-rooted resentment of
everything Internet. C'mon, guys – even Lou Dobbs at CNN eventually saw the
light…
The Kyl Bill is a piece of legislation floating around the Senate aimed at
outlawing Internet gambling in the United States. Apparently, it's okay for
the government to operate the nation's largest gambling business (through
state lotteries) but at the same time try to protect us from the pitfalls
of I-gambling. Mark my words: when the government figures out how to take a
cut of I-gambling revenues, it will be legalized.
The CMGI-Compaq-Alta Vista deal certainly was a doozy. Compaq got 16% of 40
up-and-coming CMGI-held Internet companies plus $200 million, and kept
nearly 30% of Alta Vista (17% plus 16% of CMGI's 83% – got it?). CMGI got
83% of Alta Vista, perhaps the best search engine, the no. 10 site in the
U.S. in terms of traffic (and number 5 in the world) and a perfect
complement to many of CMGI's “babies.” CMGI also now has a strong
relationship with the world's number 1 computer maker and a potential
arrangement with the top Internet ad company, Doubleclick. The biggest
question this deal raises: what happens to Lycos?
A recent Wall Street Journal article pointed out the wide gap between the
current stock prices of some high profile Internets and some of the target
prices given to them by analysts. The article asked these analysts why
stocks like Amazon, America Online and Doubleclick were trading as much as
100 points below their target prices, and whether the analysts should lower
the marks. The article made me wonder what this reporter had been doing
since April. Most of the stocks he listed had corrected 50% or better in
the past three months, after the analysts issued their targets. Call it
premature extrapolation. If analysts set their targets for ‘99, I say
they're fair game on December 31, not June 17.
Finally, from the perils of over-the-counter land comes a stock that's up
1000% year to date but can't get written up on some of the “major”
financial sites or get a message board on Yahoo, all because of its
bulletin board status. Luckily, Internet Stock News has been telling the
world about Starnet Communications (SNMM) for about seven months. But don't
expect our little secret to be under wraps much longer – earnings, NASDAQ
listing, a dynamic CEO and an incredible story will make this rare,
profitable Internet a media darling.
4. ISN EVENTS
COME CHAT WITH OUR SENIOR EDITOR:
Our senior editor will be available every week at Sunday 7PM PST to chat
with ISN subscribers about the internet industry, recent happenings, and
any other questions that you might have.
Go to clubs.yahoo.com to register for FREE!
POST MESSAGES TO ISN STAFF AND DISCUSS INTERNET STOCKS!
Please feel free to post any questions or comments about Internet stocks to
our subscribers and staff in this area:
Members of our ISN Yahoo! Club will also be notified of Internet-related
Direct Public Offerings first!
ISN Yahoo! Club: clubs.yahoo.com
JOBS AT ISN:
We are always seeking enthusiastic minds to join our team as writers,
analysts, and marketing representatives. Current open positions are (1)
Internet-knowledgeable securities attorney (full-time), and (2) advanced
web designers/programmers for Internet Stock News. Send
mailto:jobs@internetstocknews.com if you are interested and qualified and
are willing to relocate to San Diego. Individuals must be experienced and
familiar with various Internet sectors and business models. Starting
salaries range from $50,000 to $120,000 plus stock options depending on
experience.
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INTERNET STOCK NEWS (ISN)© 1999
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The information presented in this document is not to be construed as an
offer to sell or a solicitation to buy any securities referred to herein.
We encourage our readers to invest carefully and read the information
available at the web sites of the Securities and Exchange Commission
("SEC") at sec.gov and the National Association of Securities
Dealers ("NASD") at nasd.com. Readers can review all public
filings by companies at the SEC's EDGAR page. The NASD has published
information on how to invest carefully at its web site. Internet Stock
News publishes information regarding selected companies involved in the
Internet industry which those interested in the Internet may use as
information relating to their interests or investments. Many companies
featured in Internet Stock News are clients of IP Equity, Inc., the owner
of Internet Stock News, which receives compensation for assistance in
handling public relations and shareholder relations. Comments in Internet
Stock News are the observations of Internet Stock News and contain sincere
opinions on values and opportunities. They are not intended to be
recommendations to buy, hold, or sell securities. Most information in our
media is derived from the subject companies, without independent
verification by IP Equity as to accuracy and completeness. Some of the
subject companies are clients compensating IP Equity for various services
it provides. Internet Stock News endeavors to research the industry and
obtain independent views in preparing its publications, but there is no
assurance of accuracy. IP Equity does not recommend, warrant or guaranty
the success of any action taken in reliance on statements made in Internet
Stock News. Investments in Internet companies are generally deemed to be
highly speculative and to involve substantial risk, making it appropriate
for readers to consult with professional investment advisors and to make
independent investigations before acting on information published by
Internet Stock News. The Internet industry is changing with great speed,
making it appropriate to update information frequently, which Internet
Stock News cannot undertake to assure. Internet Stock News owners,
employees, writers, their families and associates may have investments in
companies featured in Internet Stock News and may elect to sell these
investments or buy additional investments in these companies at any time.
The following companies featured in Internet Stock News have compensated IP
Equity, Inc. for public relations and shareholder relations services in the
last 12 months with payment in cash, stock, and options which, at the time
of engagement was not valued at more than three hundred thousand dollars:
Billserv.com, Inc., Circle Group Internet, Inc., Information Highway, Inc.,
Internet Ventures, Inc., Softek Technologies, Inc., mPhase Technologies,
Inc., and Topclick International, Inc. In addition, IP Equity, the
publisher of this newsletter and its officers, employees, and consultants
are believed to own (through share purchases on the open market or via
private placement or direct public offerings) no more than 15,500 shares of
CMGI, Inc., 6000 shares of At Home, Inc., 24,000 shares of Amazon.com, Inc,
1000 shares of Ebay, Inc., Inc. 6200 shares of Internet Ventures, Inc.,
20,000 shares of FreeRealTime.com, Inc., 200,000 shares of
Information-Highway.com, Inc. , 100,000 shares of Starnet Communications,
Inc., and 2400 shares of SportsLine USA, Inc. Permission to use, copy and
distribute the materials contained in these web pages without fee is
granted, provided that our copyright notice appears in all copies and that
our name not be used in publicity pertaining to distribution of the
information without our specific written consent. You can tell us your
thoughts by sending mailto:stocktalk@internetstocknews.com Our interim web
site is up at internetstocknews.com and highlights Internet
industry news and investment opportunities and provides market data and
commentary. If you have any questions, comments, or suggestions concerning
our web site, as well as questions regarding advertising and marketing
solutions please send mailto:stocktalk@internetstocknews.com. We wish you
all an ever increasing knowledge of the markets and an extremely profitable
return on your Internet investments. Have a great weekend!
Sincerely,
ISN |
