Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: westpacific who wrote (101093)	4/27/2000 11:33:00 PM
From: westpacific	Respond to of 108040

EMBT - a gem waiting to be discovered, recent IPO that was offered on a very weak day. This is a hugh bargain right now and being accumulated - including by me! :) e-commerce software development tools This firm makes software development tools needed for the rapid development and deployment of e-commerce applications. It?s principal focus is data base efficiency. The firm has an established distribution channel consisting of telesales in North America and distributors in Europe and Asia. It reports more than 21,000 users including such well known firms as AT&T, Aetna, Bell Mobility, Fidelity, Hewlett-Packard, IBM, and Williams Communications. Although still small, growth has been impressive. Revenues grew at a 110.4% rate between ?98-?99, reaching $19.2 million. The firm added another $1.4 million in deferred revenues. Performance has been impressive for such a small and fast growing firm. It has a 94.4% gross margin, an 11.9% operating margin, and a 11.4% net margin. As would be expected, cash flows are positive. Immediately post offering, the firm would have an equivalent ?99 EPS of $0.086 and a $0.26 cash flow per share. Valuations in this sector have been severely damaged by Nasdaq?s 4/14 plunge. On average, comparables lost more than 50% of their valuation in the week ending 4/14. Prior to this sharp decline, the sector was beginning to show weakness from saturation, but not at these levels. Recent IPO?s may provide some additional perspective. Silknet Software was a $45 million deal offered on 5/5. Offered at 15, it closed at $35.13 for a 134.2% first day. It recently traded at $55.88, adding 59.1% in the aftermarket. InterWorld was a $45 million deal offered on 8/11. Offered at $15, it closed at $17.75 for a 18.3% first day. It recently traded at $19.50, adding 9.9% in the aftermarket. Quest Software was a $61.6 million deal offered on 8/13. Offered at $14, it closed at $47 for a 235.7% first day. It recently traded at $26.50, off 43.6% in the aftermarket. Active Software was a $38.5 million deal offered on 8/13. Offered at $11 it closed at $14 for a 27.3% first day. It recently traded at $35.88, adding 156.3% in the aftermarket. OnDisplay was a $98 million deal offered on 12/17. Offered at $28, it closed at $77 for a 175% first day. It recently traded at $24.97, off 67.6% in the aftermarket and at the offer level. WebMethods was a $143.5 million deal offered on 2/11/00. Offered at $35, it closed at $212.63 for a 507.5% first day. It recently traded at $63.94, off 69.9% in the aftermarket. Reflecting valuation uncertainties, pre-offering demand has been reported as moderate. This firm has the potential to be a solid long term player. The management has demonstrated the ability to manage 100+% growth profitably. This suggests they are ready for ?prime time?. Unfortunately, the timing of this offering is problematical. Sector valuations have been wildly biased by general market events, and early valuations are expected to reflect these uncertainties. Consequently, expect a modest initial reception (e.g., 15%-35%) followed by near term volatility. However, this may be an interesting firm to revisit in another month, once the IPO distribution and market direction has stabilized.

To: westpacific who wrote (101093)	4/27/2000 11:34:00 PM
From: Marshall001	Read Replies (2) \| Respond to of 108040

West.. I was on PECS right away.. (A little early actually) I think this one would be trading in the mid teens had they not IPO'd the same day that OPAY got hammered. The concept of a government contracted IT company makes me all giddy. We all know a couple of things.. 1) The government is behind the times as far as Internet and things like that. 2) The government tends to pay a little more than the average company. 3) Its damn near impossible to lose a government contract once its signed. Holding 1500 from IPO day at an average of 8 5/8. M