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Technology Stocks : Buying IPOs on the open market -- Ignore unavailable to you. Want to Upgrade?

To: Captain James T. Kirk who wrote (5374)	3/1/2000 11:22:00 AM
From: Jim B	Read Replies (1) \| Respond to of 5529

44 x 41.. for ONVI.. way undervalued Onvia.com (ONVI) About: Onvia.com is an operator of a business to business marketplace and website for small businesses. Through the marketplace at onvia.com, companies can register to either buy or sell products. The company's unique quote request service allows buyers to submit a detailed request for a product or service. Once that is completed, the service finds a list of qualified merchants or providers to provide the required product or task. Currently the site features over 6,500 businesses that act as suppliers, and over 25,000 products on sale. The company is partially owned by Internet Capital Group (ICGE). Key Competitors: BizBuyer, Work.com, VerticalNet, bCentral Financial Information: 1998 Sales: 1 million dollars 1999 Sales (for the nine months ended September 30): 13.6 million dollars 1998 Net Income: Loss of .7 million dollars 1999 Net Income (for the nine months ended September 30): Loss of 16.2 million dollars IPO Information: Range: 11 to 13 Float: 8 million shares Post-Offering Shares: 76.2 million shares IPO Valuation (based on a price of 13): 990.6 million dollars Underwriters: Lead: Credit Suisse First Boston Others: FleetBoston Robertson Stephens, Hambricht & Quist, E*Offering, William & Blair Analysis: There really isn't much not to like here. The business to business sector is arguably the market's hottest, especially with the deal among the big three automakers to combine and use a huge business to business marketplace for procurement. Also the sector relating to Internet small business services got a boost with the announcement from Excite@Home, and DowJones that they would work together to build a small business portal. Combined the two represent a very huge and hot sector from that Onvia.com hopes to dominate. Business to business e-commerce is expected to grow to 1.3 trillion in 2003, while the small business will grow to a 107 billion dollar market by 2002, according to Forrester Research and IDC. Onvia.com's sales growth is phenomenal and you might as well ignore losses in the business to business sector, because no one really cares. The deal's valuation looks extremely cheap when you compare it to competitor VerticalNet's valuation. VerticalNet trades at a price to sales ratio of about 390, and if you applied that valuation to Onvia.com, they should be worth about 5.3 billion dollars, or a little less than 6 times the current valuation. The deal's underwriters are very strong led by Credit Suisse First Boston which has arguably been the most successful underwriter this year. Overall expect a huge premium for this deal.