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Technology Stocks : Healtheon Corporation (HLTH) -- Ignore unavailable to you. Want to Upgrade?

To: coachbobknight who wrote (217)	6/6/1999 9:32:00 PM
From: Tom Hua	Read Replies (1) \| Respond to of 861

Coach, from the 6/4 edition of TSC by Herb Greenberg. Regards, Tom Fried-Day: Un-Healtheon?: When they were hot, investors threw caution to the wind on Internet stocks, ignoring the types of disclosures and risks that used to take on some kind of meaning. And if there's one thing the likes of me and Adam Lashinsky thought we'd learned, it's that it's not much use mocking young public venture Internet companies for one common disclosure: heavy reliance on a few customers. Whaddaya expect out of year-old company, anyway, you goofball? But these days, it's starting to come clear that even with these fledgling Internet companies, those disclosures may be there for a reason: The company doesn't want you to come back saying that you weren't warned. Take Healtheon (HLTH:Nasdaq), the online health transaction and information company. If there were ever a company not to bet against, it would be Healtheon. Or so you would think. It's backed by some of the brightest and richest in Silicon Valley. However, Wall Street's sudden lack of interest in Internet stocks provides a good reminder to investors to go back and re-read two important disclosures from the company's recent 10-Q, 10-K and pre-IPO registration statement. The first involves SmithKline Labs, which is one of four customers that generate the bulk of Healtheon's revs. In February SmithKline Beecham (SBH:NYSE) sold SmithKline Labs to Quest Diagnostics (DGX:NYSE). Healtheon discloses that it has no clue whether Quest will continue the relationship with Healtheon. The company declined comment beyond the docs. The second, and perhaps more important, discloses that Healtheon is in the middle of renegotiating the terms of its agreement with UnitedHealth Group (UNH:NYSE), another of its Big Four. Healtheon says the two sides are negotiating new prices "that will reduce the rates paid by UnitedHealth" to Healtheon. That raises the question, of course, whether the other three will try to get the same deal. Sure they will, but like most new Internet companies, Healtheon will keep changing its biz plan to try to stay one step ahead of the skeptics, which is why its deal to buy WebMD may have been just what the doctor ordered.