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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (81190)	3/1/2000 7:57:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 108040

My hunch....LNUX has bottomed out and will rebound with new IPO's shortly............Despite the mix in results, analysts say Linux still resonates with investors. With the growth of e-commerce, the popularity of the upstart OS is expected to grow as Web site owners load up on more hardware and networking equipment. Linux offers a way to cut costs. "Two of the four deals in the sector have crapped out. But there's still a lot of hype in the (market)," said Jeff Hirschkorn, senior analyst with IPO.com. "This sector is rapidly evolving, and usually you see good results in these circumstances." Because the software can be obtained for free, Linux companies are seeking out ancillary ways to make money. Red Hat plans to concentrate on services. While VA Linux has plans to move into services as well, it specializes in server computer sales and expects services will be only a tenth of its revenue by the end of 2001. When the "Linux" angle is scraped away, VA Linux is largely a computer maker competing against giants like IBM and Dell in a market where profit margins are slim. Which strategy works best for the long haul depends on perspective. Red Hat has climbed nearly threefold since its IPO. The company closed at $26.03 on its first day of trading, adjusting for a 2-for-1 split. Yesterday it finished down $4.81, or about 7 percent, at $63.56. It was down about 2 percent in midday trading today. Meanwhile, Cobalt Networks is down only slightly from its first-day close of $128.13. Cobalt yesterday ended the day at $100.50, down $3.75, or about 3.6 percent. The company's performance may be linked to the appeal of server appliances, special-purpose computers tailored to do a specific job faster and cheaper. Server appliance companies such as Network Appliance have generally had rising stock prices. The question now is what happens with Linux-related companies such as Caldera Systems and Linuxcare, both of which are preparing for their public debut. Others like Lineo, CyberNet Systems, TurboLinux and SuSE are expected to file their IPO plans in the near future. "These four deals all priced their IPOs above their range, so I don't think VA or Andover will effect future deals," Hirschkorn said. "What is key to the sector's future IPO performance is the market's overall tone." ALSO.......CBS marketwatch reports on ICGE.......Although the so-called B2B e-commerce market is more than three times the size of the online retail market, the combined market cap of business-to-business companies is just one-tenth that of the better-known online shopping sites, according to Eric Upin, an analyst at Robertson Stephens. His top pick: Internet Capital Group (ICGE: news, msgs), which alone has a market cap of about $29 billion, having risen 4 3/4 to 110 1/2 Wednesday. Business-to-business exchanges allow companies to buy and sell goods over the Internet, a process that is typically cheaper and less time-consuming than traditional purchasing. Upin added that he expects to see 50 business-to-business exchange sites start operations this year.