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Technology Stocks : Internet Initiative Japan Inc-(IIJI) -- Ignore unavailable to you. Want to Upgrade?

To: Bimini who wrote (73)	9/9/1999 10:39:00 AM
From: Rupert	Respond to of 170

RE: "the latest earnings report shows substantial increase in losses" This is fairly typical of most of the Internet stocks in my portfolio! :) OK, unless I am missing something big going on behind the scenes, here's what I think is going on with IIJI: 1) Internet mania is still alive and well, but it is moving abroad. People Want To Believe, but the US market is oversaturated with investment dollars and the US Internet companies are perceived as being fully valued or overvalued, so looking abroad for growth in this sector is one next logical step. Investing abroad outside of mutual funds can be hard but here is a Japanese Internet company that trades domestically on the Nasdaq. Looks and feels (and so far behaves) like a US Internet stock but actually based in Japan. 2) Japan is a mature capitalist economy with millions of computer and electronics savvy consumers, but the growth of the Internet has been somewhat stifled by high telecomm costs and a stagnant economy and entrepreneurial system. However the economy is starting to make positive noises, and some US-style competition seems to be reaching the telecomm market. 3) As the Asian economy seems to be coming back to life, inflows to beaten down regional mutual funds may start to increase. These fund managers have to spend this new money on something, and in particular something that will give said new investors some immediate performance to keep 'em interested. (I don't know what the institutional ownership of IIJI is however). 4) If you've been reading some of the research posted on this thread you'll see that IIJ is involved in several businesses (there's a good summary at the end of their recent earnings statement, but it doesn't cover everything): quicken.excite.com Another summary/guide is at: iij.ad.jp If you look at all these business, then look at the market cap of roughly equivalent US Internet companies in each of those business sectors (web hosting, network services, Internet backbones, etc) and then total them up, you'll get a figure that is between 2x and 5x more than IIJ's current market cap (with all the caveats and assumptions this comparison entails). 5) Almost any positive news report about the economy, technology or the Internet from Japan and Asia can be construed as being a positive to an Internet company based in that region. For example, the announcement from Global Crossing, Softbank and Microsoft yesterday: quicken.excite.com throws additional attention on the potential of this area, as well as providing additional telecom capacity (which IIJ noted in their earnings release as being a limiting factor in their immediate business growth). If Microsoft is interested in it, there must be something there, etc. 6) IIJI is involved in the hot Internet services and infrastructure sector...it's not an advertising supported web portal or content provider that could be threatened by more media-savvy US competitiors. 7) Lead underwriter for the IPO was Goldman Sachs (who have so far remained quiet since the expiration of the quiet period) Just a few thoughts. Bear in mind I am an amateur and novice. Other thoughts welcome. I do feel that people who are willing to hold on to the stock will be rewarded with even higher prices eventually, but not willing to make any other prediction than that (cos I am absolutely terrible at predicting stocks). (I own IIJI at average of $44.38. Watched it but missed it in the $20s ;) ).