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Technology Stocks : NetObjects, Inc. (NETO) -- Ignore unavailable to you. Want to Upgrade?

To: Ken Whiteside who wrote (19)	5/2/1999 10:33:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 278

NETO- Red flags & Green flags. Let us look at the thing dispassionately shall we? Bleeding edge or not I see some red flags and some green flags. Firts the red flags. Massive debt. The company is expected to raise between $70 mil to $80 mil through the IPO the majority of which will have to go to pay down debt,not a good sign. According to their financials the company has a working capital deficit of close to $30 million,total deficit is show as +$55 mil.The question is can they have a go at it with what is left ??? Auditors Warning. The auditor of the company has a warning put out in the filing (safe harbor or not) questioning the viability of the company as a going concern,not a good thing. Green flags IBM- The fact that IBM owns more than 80% of the company should give some consolation to the potential investors and can be taken as a green flag,but the question is will they continue hold their majority stake once the lockup period has expired????? Perhpas IBM can come through and market the products through their system,may be that has been the plan all along. IBM's involvement with the company certainly is nothing to laugh at as they are enormously powerful as we all know,this is a good thing. Credible Underwriters. The fact that BT Alex Brown,BankBoston,and Piper Jaffary etc are involved in the underwriting and this can be considered as a green flag. I don't think they will jeopardize their status and reputations by underwriting a loser and a dud,unless of course IBM exerted their influence in accomplishing this feat. So you see,this is how I see it and I am at a loss as to what to make of it all, very interesting situation nonetheless.