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Technology Stocks : OBJECT DESIGN Inc.: Bargain of the year!! -- Ignore unavailable to you. Want to Upgrade?

To: GUSTAVE JAEGER who wrote (2221)	8/18/1998 10:09:00 AM
From: The Professor	Read Replies (1) \| Respond to of 3194

Thanks for the posting, Gustave. Here are my thoughts on the Gemstone's planned IPO. You can view Gemstone's S-1 filing at: sec.gov These are the interesting tidbits that I gleaned from the filing: - Single shareholder from Singapore will control 71.6% of stock after IPO. - 2M shares to be sold by company at a proposed price of $10-12. - Approximately 9M shares will be outstanding after IPO. - NASDAQ symbol will be GSTN. - Always had an operating loss every year. - Reliance on Smalltalk for virtually all of their revenue. Gemstone/J has not been a material contributor yet. 1996 - $13.7M in revenues = $8.9M licenses + $4.8M services 1997 - $18.7M in revenues = $6.2M licenses + $12.5M services 1998 - $10.2M in revenues = $5.1M licenses + $5.1M services 1996 - Net loss of $6.8M 1997 - Net loss of $8.2M 1998 - Net loss of $1.2M - revenue growth is OK but a big chunk of 97 revenue growth is because of services from the IBM-Japan Smalltalk deal. - Reliance on Sprint as a customer. - Cash position is weak. I wonder if their big investor is tired of funding the losses. After Sun bought NetDynamics and not Gemstone, maybe he's pushing them to do the IPO so he does not have to write another check. - Positioning themselves as an application server vendor, not an object oriented database. View BEA, Inprise, Iona, Sun, WebLogic as primary competitors, not Object Design, Versant, Poet, or Objectivity. The following are my opinions on their prospects for an IPO: - Tech IPO market is weak in general - Using 2nd-tier banks to go public. This means other higher-quality banks turned them down. - Their growth numbers aren't great. Unless they have something positive to say on the road show about future business, I don't think investors will get too excited. With the current market conditions, I'm doubtful that they will actually carry the IPO out. Any other comments? The Professor