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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (117725)	11/30/2000 5:21:25 PM
From: WaveSeeker	Read Replies (2) \| Respond to of 120523

NUFO guided revs up 25% tonight... fiber on fire after hours media.corporate-ir.net

To: Jenna who wrote (117725)	11/30/2000 5:57:35 PM
From: puborectalis	Respond to of 120523

Internet Capital Now Below IPO Price After Wild Ride (Update2) 11/30/00 2:20:00 PM Source: Bloomberg News (Adds CEO's comments in 6th, 8th, 12th and 16th paragraphs.) Wayne, Pennsylvania, Nov. 30 (Bloomberg) -- Internet Capital Group Inc., which after four months as a public company was worth more than General Motors Corp., has now fallen so far that it closed below its initial public offering price for the first time. Wayne Pennsylvania-based ICG fell 75 cents to $5.75 in New York trading and is down 97 percent from its peak closing price of $200 on Jan. 3. The investor in online industrial commerce companies, valued at as much as $52 billion, has since shed more than $50 billion of that. ''It was the wild frontier at the beginning of the year and ICG looked like a prophet shining in the dark,'' said Patrick Walravens, analyst with Lehman Brothers, who has a ''neutral'' rating on the stock. ''Between their cash crunch and the cash needs of their 80 partner companies, it's not clear how they get out of this box. It really isn't.'' The decline in technology stocks that began in March has been especially hard on Internet companies. Of 222 stocks in the Bloomberg U.S. Internet Index public since at least Dec. 31, only 13 have shown gains this year; 183 are down more than 50 percent. Including ICG, 74 index members are down at least 90 percent. Internet Capital first sold shares to the public on Aug. 5, 1999 at a split-adjusted $6 apiece. ''There are excesses in the system and some of that needed to get flushed out and it's good -- not good, but healthy,'' said Walter Buckley, ICG's chief executive. ''But I think we've well overdone it in certain areas.'' Layoffs Internet Capital earlier this month fired 50 workers, 35 percent of its staff, in an effort to reduce operating expenses. The firm, which counts on proceeds from portfolio companies' IPOs to provide capital for new investments, hasn't had such an IPO since March. It cut investments to $120 million in the third quarter from a $469 million average in the first two quarters. ''Most of our cutbacks have come in the acquisitions area, because we're still going to do acquisitions, but at a much slower pace,'' Buckley said. ''We're still building good companies, focusing on our existing portfolio.'' Walravens reduced his rating from ''buy'' two weeks ago with the stock at $15.31. He began recommending the stock in December 1999 at $117.81. Of 15 analysts covering the stock, 12 still recommend it. Business Model ''I feel terrible about (the downgrade) but the business model clearly isn't working and you have to tell your clients,'' Walravens said. The company owns too many minority stakes and has found it difficult to create a cohesive network, he said. ICG also erred by focusing on online exchanges instead of infrastructure software makers and service providers, Walravens added. ICG is being valued as a conglomerate, trading at a discount to the value of its assets, including six publicly traded companies, said Walravens. ''The market is placing no value on the private companies right now -- and there are 75 of them -- which is ludicrous,'' Buckley said. Insider sales have also hurt: many venture investors acquired stock before the IPO for pennies a share and have been booking gains, resulting in 120 million to 140 million company shares flooding onto the public market in six months, he said. ''Most of us still haven't sold any stock,'' said Buckley. ''By and large we tried to keep everyone's feet on the ground, but when the stock goes up five points a day people lose some focus. Today we've pretty much shut out the stock part of the equation -- the whole euphoria has gone away.'' The company has more than a year of cash and liquid assets available, meaning it can tend to internal matters without worrying about the stock price or investor disgust with business- to-business electronic commerce, he said. ''I tell people that we can only focus on what we can control,'' said Buckley. ''We cannot move the ocean.''