Kemble, More info! :)Leigh "Investors should also watch those that benefit from increasing use of software and computer systems such as Microsoft Corp., Cisco Systems Inc., Dell Computer Corp., MCI WorldCom Inc., Sun Microsystems Inc."
quote.bloomberg.com
Goldman Sees 100 Business-to-Business IPOs in 18 Mths (Update1)
By Emma Moody
Goldman Sees 100 Business-to-Business IPOs in 18 Mths (Update1)
(Adds details on 1999 and 2000 IPOs in 5th paragraph)
New York, March 22 (Bloomberg) -- As many as 100 online
business-to-business commerce companies will go public in the next
18 months, hoping for a slice of the industry's six fold growth
over five years, Goldman Sachs Group Inc. estimates.
Only a handful of those will survive, Goldman's Silicon
Valley-based business-to-business analyst Tom Berquist said in a
presentation to clients at New York's Pierre Hotel.
``Over time there will be a gravitation towards top-tier
companies, there will probably be only one big winner per
industry,' Berquist said. Goldman, the top underwriter of initial
public offerings last year by value, plans this year to take
public as many as 10 companies that sell software and services to
support Internet commerce.
Demand for those companies has surged as investors identify
the potential value of online trade of goods and services. That
value could to grow to $3 trillion in the U.S. by 2005, based on
expectations that about 16 percent of commerce will be conducted
online by then, Berquist said.
Companies have started rallying to the investor demand.
In 1999, 15 companies business-to-business companies went
public. Already this year six have staged IPOs. Those companies
have performed better on average than other IPOs. The 21 public
companies have risen more than sevenfold on average, according to
CommScan LLC, which tracks IPOs. That compares with an average
threefold rise for all IPOs in that time.
For these companies, ``the critical success factor is that
they have to get there first and execute,' Berquist said. ``They
have to get people on board, they have to continue to stay on
them, to get their spending online.'
Companies to Watch
Companies to watch include VerticalNet Inc., which operates a
web of business-to-business trading sites, Healtheon/WEBMD Corp.,
whose sites link doctors, patients and insurers, and Internet
Capital Group Inc. which has stakes in more than 60 private and
public business-to-business companies, including VerticalNet,
Berquist said. VerticalNet is the fourth-best performing IPO of
1999, rising 24-fold since its February IPO.
He also picked Noosh Inc., a company being taken public this
year by Goldman, which runs an online market for printing
services.
Commerce One Inc., FreeMarkets Inc., PurchasePro.com Inc. and
Ariba Inc. are among the best companies that help build and host
Internet marketplaces, he said.
The climbing stock prices of Commerce One and Ariba, reflect
investors' bets that one of them will become the dominant provider
of Internet marketplaces, Berquist said. Commerce One is the
second-best performing IPO of 1999, rising 29-fold to date.
Right now, ``people are making bets and waiting to see what's
going to come through the pipeline,' Berquist said. ``The reality
is that this is going to be very, very profitable' for companies
that win.
Among companies that build the infrastructure for online
trading, investors should watch i2 Technologies Inc., Oracle
Corp., SAP AG and TenFold Corp., he said.
Investors should also watch those that benefit from
increasing use of software and computer systems such as Microsoft
Corp., Cisco Systems Inc., Dell Computer Corp., MCI WorldCom Inc.,
Sun Microsystems Inc.
Increasing use of the Internet for buying and selling goods
will help reduce costs more rapidly for companies that move online
quickly such as car manufacturers Ford Motor Co. and General
Motors Corp., airplane maker Boeing Co., and German computer chip
broker CE Consumer Electronics AG, he said. |
