Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Bid.com International (BIDS) -- Ignore unavailable to you. Want to Upgrade?

To: mccowaner who wrote (10517)	2/25/1999 3:40:00 PM
From: Denise D	Read Replies (2) \| Respond to of 37507

Mccowaner, Your source must be the same as mine... got busy at the The Globe and Mail site; the full article is as follows: Down in the Valley Thursday, February 25, 1999 MARK EVANS A visit to Silicon Valley can be downright depressing. But it has nothing to do with being stuck in traffic jams that stretch for kilometres or the embarrassment of using a Canadian dollar that acts more like Monopoly money every day. The real downer about Silicon Valley -- nestled between San Francisco and San Jose -- is the obvious and painful reality that Canada is falling behind when it comes to the Internet. While Silicon Valley is undoubtedly the world's high-tech mecca, the extent to which companies, entrepreneurs and consumers there have jumped on the Internet bandwagon is staggering. It's difficult to travel more than few blocks in San Francisco or San Jose without seeing large billboards for Yahoo Inc., Amazon.com Inc., Macromedia Inc. and a bevy of other Internet participants. The Internet has been courted, seduced and embraced by the Silicon Valley, providing outsiders with eye-opening insight into the future. Mind you, the future in Silicon Valley will take place years before it takes root in Canada. After nearly a week of conversations with corporate executives, public relations firms, cab drivers, waiters and friends in the valley, it's become clear Canada talks the talk about the Internet but doesn't walk the walk. Sure, the government and a small cadre of executives, consultants and media types talk and write about the New Economy and its importance to Canada's future, but it's more lip service than all-out action. Take the federal government, for example. One of the biggest issues in the high-tech sector is access to capital. It's difficult for entrepreneurs to get cash because banks are scared to death of businesses armed with concepts rather than assets and individual investors are frightened off by hefty capital-gains taxes. A few years ago, Ottawa took a positive step by offering investors tax credits to invest in labour-sponsored funds, many of which were focused on technology. Although critics argued these investment firms could have been more aggressive, the program was a big success, as capital flooded into the sector. Unfortunately, Ottawa realized that labour-sponsored funds were thriving because tax-weary Canadians were taking advantage of an attractive way to reduce their taxes. That prompted Ottawa to scale back the tax benefits. Not surprisingly, many investors took their money elsewhere. In Silicon Valley, high-tech investment means opportunity rather than risk. An army of institutional investors, venture-capital firms and wealthy individuals provide the market with fuel for growth -- a contrast to Canadians who still see Barrick Gold Corp. as a high-growth company. Another sign that Canada's Internet industry is a bit of a joke is the lack of publicly traded companies. You could probably count the number of pure Internet plays on two hands, although many people would be pressed to name any of them beyond Bid.Com International Inc. Why are there so few in Canada, while it seems there are new batch of initial public offerings in the United States every day? It comes back to financing. The Internet still frightens Canadian investors who have watched U.S. Internet stocks soar in the past year. In Canada, many people are counting the days until the Internet bubble bursts and the investment mania to comes crashing down. In the United States, the high valuations symbolize the optimism that the Internet is changing the foundations of business. The New Economy has become a trendy thing to talk about in Canada but the hard truth is that our economy and investment community is still focused on things like chopping down trees and ripping minerals out of the ground. The bottom line -- while hard to swallow -- is that Canada is missing the boat and the Internet will sail away to the United States, India, China and Europe before anyone notices that it has left. Now, that's a depressing thought. One thing I got out of this article was, perhaps, an explanation for why Bid.Com's float might be so high. Remember when I referred to tech firms finding it difficult to get capital from the bank? (https://www.siliconinvestor.com/readmsg.aspx?msgid=7956436) My argument to Doug was that perhaps Bid.Com insiders used their own money pre-IPO to fund the company and having nothing left to buy shares, but this may also be the case for such a high float. This article echoes that thought by saying: "One of the biggest issues in the high-tech sector is access to capital. It's difficult for entrepreneurs to get cash because banks are scared to death of businesses armed with concepts rather than assets..." Always learning... Regards, Denise.