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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (95977)	3/9/2000 9:27:00 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

>Why was AMZN strong today? Eurpoean revenue expectations? When it comes to Amazon.com I don't have a clue. All I know is Amazon.com is a great company and I'd be irresponsible not to say it. Full disclosure. I own Webvan and I wish I didn't. >NEW YORK, March 9 (Reuters) - Analysts doubt that Internet grocer HomeGrocer.com Inc. will be able to fulfill the dot-com promise of big first day gains when it makes its initial public offering, expected Friday. HomeGrocer.com plans to offer 22 million shares in an expected pricing range of $10 to $12 per share. The Kirkland, Wash.-based company delivers grocery items via its own distribution system the day after they are ordered online. HomeGrocer.com currently provides deliveries to customers in Seattle; Portland, Ore.; Los Angeles; and Orange County, Calif., and it plans to expand into another eight to 10 markets within a year. While HomeGrocer.com is a Web-based company, its stock is not considered a technology issue and "the entire overall U.S. equity market is gravitating toward technology" right now, said Kenan Pollack, money editor at Hoover's Online. "Investors really have the pick of the litter" due to a number of strong technology offerings coming out in a variety of sectors, Pollack said. Pollack said that while the company's setup is good, the IPO is coming out "at a bad time when they (non-technology companies) are not being valued," as investors look to higher-tech offerings. "Money migrates toward where the buzz is," and retail offerings are not hot right now, he said. Pollack said that HomeGrocer.com could have a mild first day of trading and then boom if retail became hot later on. Start-up costs for these types of companies are "enormous" and IPO investors want to see a return on capital a lot faster than they could with online retail, he said. As past online retailer IPOs have demonstrated, HomeGrocer.com's future success is not guaranteed. Only about a third of retail consumer Web site companies that started traded in the past year or so are currently selling above their offering prices, Pollack said. "That entire sector -- not just groceries, but all retail stocks -- has really been challenged" lately, he said. Speaking specifically about the online grocery sales sector, Pollack noted that NetGrocer.com, Peapod Inc. <PPOD.O> and Webvan Group Inc. <WBVN.O> have all been struggling. Shares of Peapod, the only public online grocer that currently makes nationwide delivery, are trading at around nine after hitting a 52-week high of 16-3/8. Webvan, which closed up 9-7/8 at 24-7/8 in its Nov. 1999 debut after a heavy dose of pre-IPO buzz, currently sees its shares trading at around 12-1/2. Webvan said Thursday that it has signed leases for distribution centers in areas to which it intends to expand -- Baltimore, Denver, Philadelphia and Northern New Jersey. "While the whole concept of buying groceries via the Internet has been interesting, the concept still remains largely unproven," Irv DeGraw, research director at WorldFinanceNet.com, said in a note. DeGraw noted that "From a fundamentals perspective, its (HomeGrocer.com's) near-term outlook is weak." HomeGrocer.com's investors -- including online book and music retailer Amazon.com Inc. <AMZN.O>, venture capitalist Kliner Perkins and an entity led by former Netscape Communications Corp. chairman James Barksdale -- may give the company's shares a boost on their first day of trading, according to DeGraw. The company signed a five-year, $60 million deal with Internet services provider America Online Inc. <AOL.N> in late February that calls for the companies to develop joint Web pages in order to raise HomeGrocer.com's profile among AOL's subscribers. The online grocer said it plans to use net proceeds raised from the offering, which could reach $264 million under the expected pricing range, to fund the first phase of a national expansion and for general corporate purposes. If there were heavy demand underwriters, led by Morgan Stanley Dean Witter, would have an option to buy 3.3 million more shares. There would be more than 124 million common shares outstanding after the offering. HomeGrocer.com has applied to list its shares on the Nasdaq under the symbol <HOMG.O>. 15:23 03-09-00