To: J. Conley who wrote (541 ) 8/27/2000 11:54:26 PM From: Sir Francis Drake Read Replies (1) | Respond to JC - LDP never ran up as high as some of the high-profile VC/incubator stocks, and consequently, the bounce from the lows is both more sustainable and closer to the high. This is a great advantage from an institutional point of view. However, one must always look to the future. LDP's non-VC operations will no doubt continue to execute well, and deliver value. But, the key to growth will be the quality of their as yet non-IPO'd holdings. That is always a tough call, because there are so many factors: what is the viability and prospects of the businesses, what is the IPO climate going to be like at the time when the business is ready to be IPO'd (or is compelled by business imperative to IPO in order to raise capital) etc. I frankly doubt it is possible to make any assesment that is anything other than wild speculation, however, there is really no choice but to do that - otherwise how do you fix a fair value for LDP? I suppose, at one extreme (on the low side), you'd have a valuation that virtually discounts the VC operation by 100%, and the stock trades at book value or even below (happened in a not too distant past!), and at the other end, you are putting the value on the VC operation as if it held the germs of MSFT, CSCO, AOL, DELL etc. How can it be anything but a guess? At any given time, factors such as sector being in favor (or out of favor), market conditions, IPO environment etc., will determine the size (or lack of) any premium on LDP above the non-VC operation. That leaves us with intangibles such as trust in the quality of management and the track record. Still, by almost any measure, the valuation of LDP is still quite reasonable. I actually find valuing a CMGI or SFE, or AMPL, HHGP, RRRR etc. far more difficult. At least I can fix the lower parameters of LDP to some degree - and by that measure judge how expensive/cheap LDP is at any given moment. In that way, despite the lower profile and general lack of understanding in the investment community, I find LDP a lot SAFER as an investment, than such celebrated stocks as CMGI and SFE.
