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Technology Stocks : Internet Capital Group Inc. (ICGE) -- Ignore unavailable to you. Want to Upgrade?

To: bob dole who wrote (276)	8/17/1999 5:18:00 PM
From: still learning	Read Replies (1) \| Respond to of 4187

Well P/B isn't as interesting when you don't have visibility into how they're carrying the assets. And P/S is virtually meaningless with both companies, unless you want them selling pout of every IPO immiadately (as quickly as is feasible) to generate revenues. They don't really show much revenue until they have cap gains. The more interesting querstion is -- how do we best value them both? The float is an important point, but you also have to remember that most of the remaining shares are held by VC/insider type investors, which means most of them won't rush out and sell even when they are able to. I'd like to see more publicly held ICGE companies to better assess the value of their pipeline. OTOH look at this CMGI/ICGE: ROA 8.64/28.12 ROE 15.94/24.23 Profit margin 38%/548% All of this simply says it's hard to decide if these are similar companies in different stages of development, or very different companies entirely. I do think ICGE has a very strong mgmt team, with Sam Jadallah as a great hire. Buckley and Fox are also significant. Aside: Not everyone is high on ICGE. The red herring story (if you saw it) was very negative. though I also felt it was misleading, dinging the ICGE mgmt because, it said, ICGE execs came from "industry" and not "VC" backgrounds. Now SFE is about as much a VC company as you can find, and they were noted as one of the "industries" where ICGE execs originated. I am currently holding the shares I have (though I did try to buy some early on after the IPO and was unable to). This is not a huge position for me and I only hold a few hundred shares, so I can afford to wait and see what happens At higher prices than these I'll need to reassess but for now am hanging tough.

To: bob dole who wrote (276)	8/17/1999 6:06:00 PM
From: Tom D	Respond to of 4187

ICGE is disconnected from fundamental analysis. I think it has become a concept stock: investors are attracted to the concept of owning an internet B2B venture capital fund. For the near future, its market price will reflect supply (which you admit is very limited) and demand (which is driven by internet mania). In particular, since this is a collection of 35+ companies, it offers safety to novice internet investors who do not have the resources to personally investigate issues like management honesty and talent. Since it is a less mature company than CMGI, it does not seem particularly meaningful to compare sales and book value. It could have lower book value and sales, but much greater long-term potential than CMGI, and legitimately merit a more generous market cap. FWIW, Prudential Securities was selling an institutional analyst research report they wrote on SFE in June for $10 through Multex. In this report they postulated a 12 month future value for SFE's 20% stake in ICGE at $1.8 billion, thus giving ICGE, in their optimistic opinion, a value in 12 months of $9 billion. It would not surprise me to see this market cap for ICGE in the next few weeks, given what momentum investors have been doing to internet stocks sometimes in the last year. I am impressed with the two convincing new highs which have been made in the last two days. Obviously this is all highly speculative, but I believe in it enough to bet another $60k on it this morning. Best Regards, Tom D

To: bob dole who wrote (276)	8/17/1999 7:21:00 PM
From: Netwit	Read Replies (1) \| Respond to of 4187

Thank you Bob for the heads up. I always appreciate thoughtful analysis. The question of how we analyze these holding company stocks is interesting. Over at the CMGI thread, we look at the value of the public holdings and the number of VC deals yet to go public and the track record of the company in taking the deals public. I always look at these stocks as being like closed-end funds in that they either trade at a discount or a premium to asset value (unlike mutual funds). My hunch is that this puppy is trading at a premium because it is perceived as the next CMGI for the business 2 business sector, which is very hot right now and because it has very low float, the demand just pushes the price up. I want in but I'm waiting. Maybe in October there will be a buying opportunity.