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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: ynot who wrote (60)	3/29/1999 5:19:00 PM
From: Don Pueblo	Read Replies (2) \| Respond to of 752

IPOs by law can be disseminated in only one way, by a prospectus, before they start trading. So you'll have to get a prospectus from the underwriter (firm that is taking the deal public). If you are talking about a company that just started trading, my personal suggestion is to wait to see how the deal does for a few weeks at least before you jump on it. As far as companies that change the fundamental business, I swear I am not sharp enough to give you a good answer. I'll ask around, maybe I can con some smart guy into giving us some hints.

To: ynot who wrote (60)	3/30/1999 1:47:00 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 752

It's maybe a good idea to have an idea on the base rate outcomes for some types of strategies. IPO's other than recent internet lunacy, most IPO bets by individuals have been losers according to published research. That doesn't mean the IPO didn't go up, just that unless the lead broker is your uncle you weren't on board. After that initial pop there's often a long period of relative underperformance. Again this is sort of ancient history...as recent net and tech launches have continued to climb into the stratosphere...but fundamentally you're workin without a net. Mergers: Good for the shareholders of the acquired, not so good for the shareholders of the acquirer. techstocks.com Also it's rather difficult to outguess the market on the liklihood of a co. being acquired. Changes in strategy: Using the web as an additional marketing channel for existing products, then sprucing it up and spinning it off when it becomes clear how much someone might actually pay for it is a great thing for many companies..value enhancing for shareholders. Doing a total 180 into a different business that one has no familiarity with and strategic edge in is a recipe for disaster...If you find someone doing that send me a message...I love a good short.

To: ynot who wrote (60)	3/30/1999 4:19:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 752

ynot, there is not fast rule in IPO's. One thing that helps determine what might happen is to see how much of the pre-ipo investors are taking out. An IPO is often an "Exit strategy" for the the various "angels" and VC investors that invested in the company prior to the IPO. If they unload a substantial part of their holdings (more than let say 30%) it means to me that they do not see the prospects as too bright. You must of course relate this to the valuation of the IPO itself. As for companies that change their business in mid stream, there is no reason to assume that a company that failed in one business (and thus changes to another) will be successful in the new business, on the contrary, this behavior is a "Charlie Brown" type of behavior (there is no problem so big one cannot run away from) and as a general rule rule, such a change is a good signal to get out. After all, the original investment in a company was because of the business they were supposed to be in, if they change, the original investment theme changed as well. Just my 2 cents. Zeev