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Technology Stocks : Software.com, Inc. (SWCM) -- Ignore unavailable to you. Want to Upgrade?

To: cyprinus carpio who wrote (3)	5/15/1999 9:40:00 PM
From: Rusty Johnson	Read Replies (1) \| Respond to of 142

Big Blue, a Cup of Joe and a Little Perspective nytimes.com New York Times Interactive By GRETCHEN MORGENSON NEW YORK -- Everybody snickered last July when the Zapata Corp., an obscure over-the-counter purveyor of fish byproducts, said that it was morphing into an Internet company. But when its stock more than doubled on the news, the snickerers went silent. If the gambit could propel shares of an unknown like Zapata, why not those of more established companies? Last week, the "Internet, c'est moi" strategy went big league. On Wednesday, shares in Starbucks, the trendy coffee emporium, hit a 52-week high when Scott Waltman, a Merrill Lynch analyst, reported that the company would announce an Internet strategy in June. Then, on Thursday, IBM's shares rocketed $20.50, or 9.1 percent, after the company's chairman, Louis V. Gerstner Jr., told analysts that a quarter of IBM's sales came from Internet-related businesses. So a murmur of the "I" word added $19 billion to IBM's market value and $420 million to Starbucks'. The gains proved evanescent -- IBM shares lost $5.7 billion of the gain on Friday and Starbucks' value fell about $216 million by the end of the week -- but wealth was created nevertheless. Investors can be forgiven for embracing the Internet, because it is, indeed, changing the way things work. But people rushing to whatever.com are forgetting a cardinal rule of investing: Making money from world-changing events is tricky at best. Warren E. Buffett pointed this out May 3 at Berkshire Hathaway's annual meeting. In the question-and-answer period he noted that two industries born in the 20th century had changed the course of history -- airlines and autos. But while they are wonderful businesses, Buffett said, they have proven to be lousy investments. Even as IBM and Starbucks were enriching shareholders by laying claims to Internet status, news from the Web was not all upbeat. New issues of Internet stocks were mixed. A hot number was TheStreet.com (in which The New York Times Co. owns a minority stake), issued Tuesday at $19 a share. It closed the day at $60, but fell off to $46.25 on Friday. Cooler heads prevailed in two Wednesday offerings. Careerbuilder Inc., an online job recruiter, went public at $13 and closed the week at $14.25, up 9.6 percent from the offering. That was a modest showing for an Internet stock. And Biznessonline.com, a company that designs Web sites and offers Internet access, went public at $10, ran up to $17.875 but closed Friday at $11.25. Last week also included the results of a Securities and Exchange Commission crackdown on Internet fraud. Regulators filed charges against 8 companies and 18 individuals, and warned that the SEC's "cyberforce" would bring more cases. Would-be Net fraudsters might want to reconsider their plans over a strong cup of Starbucks coffee. Back at the cafe, it is intriguing to note that even as Starbucks was planning its Internet foray, insiders at the company were busy selling shares. Through April, according to First Call, insiders sold 1.44 million shares; in all of 1998 they sold 2.4 million. A Starbucks' spokesman said that diversification was behind the insider stampede, not skepticism about the Web strategy. "Most of our executives have a large part of their net worth tied to Starbucks," said the spokesman, Alan Gulick. But the selling does make for a murky brew. Still ... it's hard to resist a company with a name like Software.com ... with real products. (Best of breed?) Red Herring, June '99, page 183 ... Herring IPO 100 Top Gainers shows Critical Path (CPTH) with a March 29 offer price of $24 and the price on March 31st at $77 for a 220.8% gain. It closed Friday at 61 7/8. (Note the peak around $150.) I expect similar price action from an offering in SWCM. bigcharts.com The desktop is as good as dead. SUNW's correct ... "the network is the computer". Hopefully nobody will want shares of Software.com so that I can buy all of them. Best of luck.