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(COMTEX) B: Internet Stock News Announces Investment Opinion: Get Acc
B: Internet Stock News Announces Investment Opinion: Get Access to Internet
IPOs!
SAN DIEGO, Oct 7, 1999 (BUSINESS WIRE) --
INTERNET STOCK NEWS: Oct. 7, 1999
"Foundry Networks: The Next Cisco? " by Marc Szem, ISN Writer
Also available on the Web at:
internetstocknews.com
The hottest IPO this year has been Foundry Networks (Nasdaq:FDRY). It
began trading on October 28, soaring 538% over the initial price of
$25.
That is the second most successful IPO of the decade, behind only
TheGlobe.com (TGLO), which gained 606% on its first day of trading.
Foundry's price range was upped 67% from the original target of
$14-$16, unlike TheGlobe.com, who' s offering price was lowered before
its first day of trading. Foundry Networks designs, develops, and
manufactures a variety of high performance networking equipment for
ISPs. High speed switching and routing IPOs have generally done well
this year. Alteon (Nasdaq:ATON), Juniper (Nasdaq:JNPR) and Brocade
(Nasdaq:BRCD) have all performed well since going public this year.
Investors have taken these stocks to incredible levels. Foundry has
been awarded a market cap of $9.01 Billion. Alteon, the smallest of the
group in terms of market cap, is valued at $3.32 Billion. Many
investors believe that one of these companies will emerge as "the next
Cisco (Nasdaq:CSCO)". Clearly the market has taken a shine to this
sector. To add fuel to the fire, on Tuesday, Foundry announced its
revenue estimates for the third quarter. They said that revenues would
exceed their internal estimates and be in the range of $36 Million to
$38 Million for the quarter. Even at the low end of the estimates,
revenue growth will be almost 800% compared to last year, and 50%
sequential growth.
One of the main reasons for the monstrous rise in these stocks can be
attributed to the lack of stocks that are in the sector. Only six or
seven companies in the sector are publicly traded. The rise can easily
be compared to Internet stocks last year. If you remember last year,
there were only a handful of Internet stocks to buy and there was
enormous demand for the shares. Revenues for the Internet companies
were in the same range as the new networking stocks. Both the Internet
stocks and the networking stocks held up in spite of a tough summer
market. Stocks like America Online (NYSE:AOL), Yahoo! and Lycos
(Nasdaq:LCOS) were bid up to similar share prices and market caps last
year.
Foundry's IPO can be directly compared to E-Bay's IPO last year. They
both debuted around the same time, they both soared far above their
offering price, and they both gave their sector, and the overall
market, a much needed lift. One difference is that the majority of the
networking companies are profitable. The other difference is that
networking equipment companies can be compared to other equipment
companies. Internet stocks had no predecessors. There was no way to
accurately gauge the potential of Internet stocks at the time.
However, high-speed networking stocks are a risky investment. Value
investors will not be purchasing any of these guys any time soon.
Secondly, these companies have only been public for six months at the
most and have a limited performance history. Foundry has only been in
business since June 1996. This story sounds familiar to any Internet
investor. It is the same story that kept me out of AOL last October. I
look at the high-speed networking stocks and I see this year's Internet
stocks. Shareholders can only hope these stocks will perform as well as
the older Internet stocks. So far they have been up to the task. The
next Cisco, who knows?
Article also available on the Web at
internetstocknews.com
About Internet Stock News
Internet Stock News is a free media publication providing FREE real
time quotes, access to Internet Initial Public Offerings (IPO's),
independent news, research, and commentary about the Internet
investment revolution. Interested analysts, brokers, institutional &
individual investors may subscribe to Internet Stock News for free at
internetstocknews.com.
Members will be periodically informed of ground floor investment
opportunities in Internet companies such as: Net2Phone (Nasdaq:NTOP),
InsWeb Corp. (Nasdaq:INSW), Focal Communications (Nasdaq:FCOM),
LookSmart (Nasdaq:LOOK), Audible (Nasdaq:ADBL), Bamboo.com
(Nasdaq:BAMB), Interliant (Nasdaq:INIT), Lionbridge Technology
(Nasdaq:LIOX), PurchasePro.com (Nasdaq:PPRO), Mission Critical Software
(Nasdaq:MCSW), Quokka Sports (Nasdaq:QKKA), Tanning Technologies
(Nasdaq:TANN), WatchGaurd Technologies (Nasdaq:WGRD), Hoovers
(Nasdaq:HOOV), JFAX.com (Nasdaq:JFAX) and N2H2 (Nasdaq:NTWO).
Copyright (C) 1999 Business Wire. All rights reserved.
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