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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Smart_Money who wrote (92616)	7/8/2002 4:38:22 PM
From: Softechie	Respond to of 99280

Don't Pick Up These Fallen Angels By James J. Cramer 07/08/2002 13:44 -------------------------------------------------------------------------------- We are seeing an awful lot of action lately in the fallen angels of the Nasdaq . Last week we heard from Micromuse , E.piphany and Openwave , all negative, of course. Today we hear from Infospace INSP , saying it will meet or exceed second-quarter financial guidance, as if anyone is paying any attention. Which brings me to an exercise that many of you have asked about: What about the stocks of the fallen angels, the big Nasdaq guns that used to be worth multiple billions that now trade under $1? Let's look at the seven stocks that used to trade north of $25 billion that are now under $1: Dollar Sale Former highfliers check out the basement Company 52-week high 52-week low Market cap (millions)* BroadVision (BVSN:Nasdaq) $5.29 $0.30 $138.4 CMGI (CMGI:Nasdaq) 3.15 0.39 184.5 Commerce One (CMRC:Nasdaq) 5.60 0.33 150.3 Corvis (CORV:Nasdaq) 4.63 0.55 227.4 Internet Capital Group (ICGE:Nasdaq) 2.10 0.20 68.8 Inktomi (INKT:Nasdaq) 9.69 0.68 127.9 Infospace (INSP:Nasdaq) 3.79 0.37 188.5 *Numbers include tradable shares only Source: TSC Can any of these come back? Can any of these survive? First, all of the companies think they can survive. No kidding, we have become quite used to, if not inured to, companies telling us all is well and that they expect big comebacks. Frankly, I don't think Internet Capital Group, Commerce One and BroadVision have much of a chance to survive. These three once had amazing values: $60 billion, $47 billion and $26 billion respectively. These were companies created during the Net boom, and I can't for the life of me see how they can make a go of things. The companies were recently valued at $70 million, $150.3 million and $138.4 million respectively, and I can't see how those companies are worth that much, given the obliteration of their markets. BroadVision develops e-business solutions -- sold to you! Internet Capital Group and Commerce One were going to dominate business-to-business Web sites. With auto company creation Covisint shrinking and General Electric getting out of the business, I don't want to touch either. I want to sell them. CMGI, at one time worth $64 billion, has some real assets; its value of $184.5 million might make for some sort of speculation. Still, I think that the odds of this company making it in a form that benefits common stock holders is very slim. I wouldn't touch it, I would still sell it. Corvis is a disaster, and I see no bottom in its core telecom business. Corvis, at one time worth $42 billion, is precisely the kind of company that is a casualty of the era, as its customers are all tapped out. It is valued north of $200 million, which seems ridiculous in light of the shambles of its end markets. I would take the 62 cents and run. Which leaves us with Inktomi and Infospace. Both of these companies, which at one time were worth $35 billion and $42 billion respectively, actually have real live businesses that might be of use to others. I think these companies are worth something to someone. They seem like decent specs at their current prices. They are the only ones of the once-mighty $25 billion club that I wouldn't sell here. It is too late to sell them, although I would commit no new capital to them. Still too early for that. What a statement.