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.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: HRAKA who wrote (32357)	4/23/1999 10:26:00 AM
From: Lucky888	Read Replies (1) \| Respond to of 122088

RRRR -- Cover so fast? Don't like the way MM play it? :) I will stay for the wild ride. L.

To: HRAKA who wrote (32357)	4/23/1999 10:43:00 AM
From: Lucky888	Respond to of 122088

LOAX -- another good short Article from other posts: --------------------------------- PO fever boosts R.I. firm By TIMOTHY C. BARMANN Journal Staff Writer Investors heady with Internet fever grabbed shares of Providence-based Log On America yesterday, as the company's stock price shot as high as $37 a share on its first day of trading. The stock closed at $35 a share, more than triple the initial public offering price of $10 per share, set by the underwriter, Dirks & Company of New York. That 250 percent gain was the fifth-best first day performance by a U.S. IPO, according to Securities Data Co. Shares began trading at 2:05 p.m. on the Nasdaq National Market under the symbol LOAX. More than 2.1 million shares were bought or sold in just two hours of trading. Log On America is one of thousands of small companies that provide Internet services to homes and businesses. It had sales last year of $776,000 and a net loss of about $422,000. The company's market value, as of yesterday's close, was $238.3 million. ''On the face of it, it's clearly crazy,'' said Gordon Anderson, editor-in-chief of Hoovers Online, which provides information about companies and operates a Web site called IPO Central. ''But a lot of crazy things happen in the market. That's not to say it's a good or bad investment either way.'' Anderson said it seems the market can't get enough of Internet stocks, many of which are trading at or near their all-time highs. The Dow Jones Internet Index in the services industry has risen 70 percent so far this year. Log On America's IPO comes amid an unprecedented flurry of other Internet companies rushing to sell their stock to the public. Over the past six weeks, 38 Internet companies filed initial public offering papers, according to yesterday's Investor's Business Daily. For all of last year, only 26 of 379 initial public offering filings were made by Internet companies. Log On America is typical among the dozen Rhode Island-based companies that provide Internet services. It provides modem banks that customers can call to link up to the Internet; dedicated connections that let customers remain online all the time; and space on computers that host World Wide Web sites. The company is one of 36 firms registered with the state as a competitive local exchange carrier. That means the company is permitted to offer telephone services in Rhode Island using its own facilities, and it can lease phone lines at a discount from Bell Atlantic. Log On America raised $22 million by selling 2.2 million shares at $10 a share. The company says it will use part of the proceeds of the stock sale to make acquistions and to enter the telephone and cable services markets. It plans to offer service in selected cities with populations between 200,000 and 2 million. The company was founded seven years ago by David R. Paolo, 31. At the time, it was a two-line computer bulletin board, operating out of Warwick. It specialized in selling classified advertising. Paolo is the president and chief executive officer. It moved to Providence in 1994, when it expanded its offerings to include Internet access for homes and businesses. Among its most prominent clients, according to the company, are Providence College, Roger Williams University, Brown University, Toray Plastics, Cookson America and the Rhode Island Public Utilities Commission. With yesterday's public offering, Paolo has become an instant millionaire, at least on paper. He is the largest single shareholder, with 2.4 million shares, or 34.2 percent of the company. The value of those holdings at yesterday's close was about $86.4 million. The directors and executive officers own about 40 percent of the outstanding shares of the company's common stock. Investors should be aware that buying stock in the company is very risky. The company says as much in a prospectus it has filed with the U.S. Securities and Exchange Commission. ''Our shares should not be purchased by an investor who cannot afford the loss of his or her entire investment,'' the document states. Among the risk factors the company lists: Log On America has incurred net losses since its inception and has accumulated a deficit of about $422,000. The company says it anticipates continuing losses. The company has a short operating history and didn't produce ''significant'' revenues until 1996. The money raised with the initial public offering is expected to carry the company for only 12 months. The company expects the need to raise more capital. The company faces ''significant strain'' on managerial, operational and financial resources because of its growth. It says it needs to improve its financial and management controls, reporting systems and procedures; and expand, train and manage its work force. The company has 13 employees -- 9 of them full time. There are just two sales and marketing employees. The company faces a lot of competition, not only in the Internet business but in the telephone business as well. The company said it believes competition will intensify.