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To: Bill Harmond who wrote (77392)	9/15/1999 3:07:00 PM
From: Lizzie Tudor	Respond to of 164684

Thanks William... I don't like cmrc because I think arba will get them eventually but I never thought they'd get this high! Actually I'm glad to see any b2b company rally.

To: Bill Harmond who wrote (77392)	9/15/1999 9:13:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Chapters Online will not climb much, analysts say By Amran Abocar TORONTO, Sept 15 (Reuters) - Chapters Online Inc. is proving to be a real page turner: will or won't the new online bookseller soar in its Canadian market debut this Tuesday. Chapters Inc. <CHP.TO>, Canada's No. 1 book retailer, raised eyebrows this week by announcing it would raise C$45.6 million in the initial public offering of the online division with a price of C$13.5 per share. But the question is how high will the shares go when the eagerly awaited IPO hits the market on Tuesday. Analysts remained cautious about the prospect of a meteoric move, pointing to recent examples of highly touted stocks which failed to live up to expectations. Several cited the much-hyped online discount brokerage firm TD Waterhouse's <TWE.N> <TWE.TO> IPO. Waterhouse, which traded as high as C$37.80 at its debut in June on the Toronto Stock Exchange, now stands at C$18.20. "This is not the excited States and I don't think we get quite as excited as they may there. I think in the long run, slow and steady wins the race," said Fred Ketchen, director of equity trading at ScotiaMcLeod Inc. "I don't want to buy it at C$100 and find it back down to C$28." Toronto-based Chapters said it would retain a 70.3 percent stake in the new company -- which has the tentative symbol of COL on the Toronto Stock Exchange -- while offering 3.4 million common shares through an underwriting team led by CIBC World Markets and Yorkton Securities. Although Chapters Online is not expected to mirror the success of Red Hat Inc. <RHAT.O> -- shares in the Linux operating system distributor went public at $14 on New York's Nasdaq on August 11 and tripled by the close -- market players said the new issue will receive an effusive welcome. "I think it's going to be pretty well received. Looking at the economics and fundamentals of this company, one would expect that there would be a lot of interest in this IPO," said Steve Horrocks, a trader at Charles Schwab Canada. "Any time you see so much internally owned by a principal shareholder, it's definitely a good sign. It means they have a lot of trust and belief in their company as a whole." In addition, Chapters Online comes with some credentials that gives it almost instant cachet: the presence of Larry Stevenson as chief executive officer and the "housekeeping seal of approval" of Silicon Valley venture capitalists Sequoia Capital. Stevenson took the unusual step of leaving his position as chief executive of Chapters Inc., which he created five years ago along with a partner, to head up the fledgling online company. And the company snagged a high-profile investor in Sequoia Capital which now holds a 10 percent stake, fully diluted, in Chapters Online. Sequoia's investment track record includes Yahoo! Inc. <YHOO.O>, Apple Computer Inc. <AAPL.O>, Cisco Systems Inc. <CSCO.O>, and Oracle Corp <ORCL.O>. Those two factors have cheered observers, despite the company's lack of a track record. "Your pay your money, take your chances," said Cynthia Rose-Martel of St. James Securities. "It was a hot offering. I'm not saying the rational behind that is necessarily right." In August, Chapters revealed revenues from its Internet sales division for the first time, reporting Chapters Online had revenues of C$3.7 million for the first quarter. But the company also said that operating losses for the online division were expected in "the foreseeable future." Ian Gordon, a senior research analyst at J.C. Williams Group, said that to be successful Chapters Online would have to work in concert with the established "bricks and mortar" side of the company. "The move in retailing has been towards multi-channel retailing. The idea that you can have an online store that is not supported by traditional stores is an outdated model," he said. ($1=$1.48 Canadian)