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Non-Tech : Proton Energy Systems Inc. - PRTN -- Ignore unavailable to you. Want to Upgrade?

To: flatsville who wrote (8)	9/26/2000 1:45:47 PM
From: Volsi Mimir	Read Replies (1) \| Respond to of 29

Red Herring IPO week ahead: new issues stay on course (check out their share price WAG) By Stephen Lacey Last Update:0:58 AM PDT September 26 2000 Just when the fun was about to begin, slower-than-expected revenue growth from chip giant Intel (Nasdaq :INTC) would seem to signal a slowdown of the IPO market. In fact, the IPO market may be the only safe haven on Wall Street. Deals will continue to get done, albeit at more modest levels. This week's calendar has remained largely intact, with 15 high-tech companies (20 overall) looking to raise $1.1 billion. Fortunately, analysts who track Intel aren't ready to generalize the bellwether's difficulties in Europe to high-tech companies. For IPO candidates that conduct most of their business within the U.S., such international macro issues aren't likely to affect their operations directly. "It's hard to tell at this time whether Intel's problems are isolated to Europe or if they reflect a slowdown in demand," says Morningstar PC/semiconductor analyst Jeremy Lopez. He notes that while rival chip maker Advanced Micro Devices (NYSE :AMD) continues to operate at full capacity, it is not yet certain which companies will suffer the same European troubles as Intel has. Nevertheless, after shaving more than $100 billion off of Intel's market capitalization, the psychological impact of the announcement on the broader market remains to be seen. "I'm not convinced that we won't see further follow-through to the downside," cautions Susan Stern, senior technical analyst at Salomon Smith Barney. Ms. Stern believes that maintaining a Nasdaq in the range of at least 3,650 to 3,700 is "critical," with the next level of support at 3,522. Any further high-tech fallout -- the Nasdaq Composite fell about 4.8 percent last week -- could mean the end of the road for longtime hopefuls such as @Road (proposed Nasdaq symbol :ARDI) , which was forced to seek an additional round of financing in the private markets after pulling its initial IPO filing in June, and WebSideStory (proposed Nasdaq symbol :WSSI) , which has languished in registration for 160 days and appears to be having difficulty finding investor support. For most high-tech issuers in this week's IPO market, however, only a severe technology fallout would keep them from pricing their deals. The quality of offerings remains high. Our top picks of the week are Cosine Communications, Proton Energy Systems, and Elastic Networks. THE RUNDOWN Company: Cosine Communications (proposed Nasdaq symbol :COSN) Business description: Cosine makes switches and software for network service providers. The company's IPSX 9000 service processing switch allows service providers to offer applications such as virtual private networks, firewalls, and broadband access. The price for its IP delivery service platform ranges from $73,000 to several million dollars, based on hardware and software configuration. Competition: Axent, Checkpoint Systems, Cisco Systems, Nortel Networks, Springtime Networks Offering: 10 million shares Price range: $20-$22, up from $15-$17 Lead manager: Goldman Sachs Street poll: Red Hot Red Herring take: Cosine Communications fits in between telecommunications carriers and a more price-sensitive end user. Although the company generated revenue of just $11.3 million for the six months of 2000, its processing switch has some serious traction -- Cosine's order backlog was $49.8 million as of June 30. The scalability of its switch gives end users affordable access to powerful software tools. Friday's price increase in the face of a difficult broader market indicates an extremely strong order book, and a surefire sign that Cosine will open at a triple-digit percentage to its offering price. Company: Proton Energy Systems (proposed Nasdaq symbol :PRTN) Business description: Proton Energy Systems makes proton exchange membrane (PEM) electrochemical products that produce hydrogen from water and electricity. The company's regenerative fuel-cell systems, when completed, will combine hydrogen-generation capabilities with a fuel-cell power generator to create an energy device that can produce and store hydrogen fuel it can later use to generate electricity. Proton Energy hopes to deliver its first commercially configured regenerative fuel-cell system for field testing by 2002. The systems will initially target the back-up power needs of industrials and laboratories. Future markets, expected anywhere from 2003 to 2005, include automobiles. Competition: Ballard Power Systems, Fuelcell Energy, H Power, United Technologies Offering: 7 million shares Price range: $8-$10 Lead manager: Morgan Stanley Dean Witter Street poll: Hot Red Herring take: The key to Proton Energy's technologies is the integration of hydrogen storage and fuel cells as a single unit. Fuel-cell companies are seen as the market's answer to high energy costs. Last month's trio of alternative energy companies -- Active Power (Nasdaq :ACPW) , Millennium Cell (Nasdaq :MCEL) , and H Power (Nasdaq :HPOW) -- are trading 170 percent above offering price, and 70.9 percent above their first-day close. Valuations are extremely bullish, and we would expect to see a large price-range increase ahead of the offering. Proton Energy's stock should command a huge aftermarket pop because of the company's limited stock float, 32 million shares. Active Power's $2.6 billion market cap, for example, implies a price of $81 a share for Proton Energy's stock.