TheStreet.com's DAILY BULLETIN
November 15, 1999
Market Data as of Close, 11/12/99:
o Dow Jones Industrial Average: 10,769.32 up 174.02, 1.64%
o Nasdaq Composite Index: 3,221.15 up 23.86, 0.75%
o S&P 500: 1,396.04 up 14.58, 1.06%
o TSC Internet: 845.68 up 24.77, 3.02%
o Russell 2000: 449.69 up 2.20, 0.49%
o 30-Year Treasury: 101 10/32 up 27/32, yield 6.024%
In Today's Bulletin:
o Editor's Letter: The Coming Week on TSC
o Weekend Report: Mannesmann Rejects Offer From Vodafone
o The Open Era: Andover.Net Readies Itself for IPO, Hambrecht Style
Also on TheStreet.com:
This Week in IPOs: Before We Slouch Into Turkey Day, Another High-Volume Week for IPOs
Also, send in your questions and join me Tuesday on
Tech Savvy: This Year's Comdex Focus: Smaller, Cheaper, Easier-to-Use PCs
These 'nonlegacy' PCs will likely find eager buyers in corporate America -- and fatten up computer makers' bottom lines.
Wrong! Rear Echelon Revelations: Addicted to Email? Just Say No
Cramer returns with some personal advice for those who can't shut off their PCs.
Door to Venture Capital Cracks Open to Small Investors
But just a crack -- a new Schwab venture requires an investment of just $25,000, but you still must have $1 million in investable assets to get in.
Global Briefing: An Alphabet Soup of EMU, FOMC and WTO
Marc Chandler says the euro is still likely to move to the upside before year-end. As for the China-WTO deal? Don't bet on it.
Editor's Letter: The Coming Week on
11/14/99 4:57 PM ET
We are creeping deeper into the fall. With that comes cooler weather, earlier evenings and anticipation of the so-called year-end rally.
This week will play a big role in setting up the possibility of a year-end sprint to the finish. The
policy group meets on Tuesday, and its choice in interest rates will set the tone for the final several weeks of the year. A month ago many on Wall Street expected another rate hike. Now, thanks to recent data that don't show screaming inflation, expectations of a rate move have diminished. (Check out our
weekly poll to let us know what you think. Or, for a lighthearted look at Tuesday's events, play our
We'll be ready on Tuesday, with the markets team providing up-to-the-second coverage and analysis of the Fed meeting. Our economist
, along with recently returned columnist
James J. Cramer
, will decipher what the Fed's action -- or inaction -- means for the markets and investors. We should have a pretty good idea by Tuesday afternoon if the final few weeks will welcome a Santa Claus rally.
While we keep a close eye on important market events, we continue to focus on improving our Commentary section. We've recently added a futures columnist,
. For those of you interested in everything from currencies to grain, Howard provides the wit and insight that you've come to expect from commentators on
. We're always hunting for more intelligent commentary, so if you've got some ideas, please let me know.
We continue to work on strengthening our Community section. We've recently added sector-based
boards, and we're working on getting more of our commentators into the message board area. This week, look for IPO specialist
on Tuesday at 2 p.m. EST. He'll be on the boards, answering your questions about the blistering-hot IPO market. Ben's proved himself a sharp analyzer of the IPO market, and his insights aren't to be missed.
Finally, if you have any questions, comments or concerns, please don't hesitate to email me at
email@example.com. You can also email our very able customer service staff at
firstname.lastname@example.org; they are eager to answer your questions about the site. Meantime, get ready for another exciting week on
L'Etoile du Nord
Weekend Report: Mannesmann Rejects Offer From Vodafone
Special to TheStreet.com
11/14/99 7:18 PM ET
The consolidation wave continued to sweep the telecommunications industry this weekend, while deals on various fronts kept U.S. regulators busy.
The race for dominance of Europe's mobile phone industry could erupt in a record bidding war. Germany's
said Sunday it turned down an unsolicited offer from Britain's
worth $106 billion. (
Coming Week in Europe provides some background on the deal.)
Other potential buyers eyeing Mannesmann have included
Meanwhile, the U.S. high-speed communications industry is about to draw itself a little closer.
, which produces fiber-optic cable, will buy
, which makes fiber-optic equipment, for $1.8 billion in stock.
The only word this weekend from
was that there would be no word prior to a planned announcement before the start of trading Monday. The company and its parent, Germany's
, declined comment before a news conference set for 1200 GMT (7 a.m. EST) Monday. For several weeks, Danzas has been rumored to be negotiating a $1.4 billion takeover of
Air Express International
. The deal would create the biggest cargo forwarder in Europe.
will help develop offshore oil fields in Iran, despite the threat of sanctions from the U.S. The deal announced Sunday is worth $800 million.
Elsewhere in the Middle East,
expects its sale of 80 F-16 warplanes to the United Arab Emirates to be signed "in the very near future," a company VP tells
. The U.S. has been holding up the $7 billion sale because of the aircrafts' weapons systems.
In the Papers
won't settle for any settlement in the antitrust case against
that limits what new software the company can include in its Windows operating system. He tells
magazine, "We'd love to resolve this thing, and we're going to be pragmatic about it."
say they have not yet taken a stance on the proposed $115 billion merger of MCI WorldCom and
, following a report in the
Saturday. Unnamed sources told the newspaper regulators were unlikely to approve the deal, which would be the largest in corporate history.
The latest issue of
, which hopes to succeed in the satellite-communications business with the launch of its 48-satellite system and with lessons learned from the failure of its rivals.
Here's something different: an Internet company with strong sales growth and a weak stock price. It's no contradiction, and the company,
National Data Corp.
, is featured in
. Reasons cited for its slump include lower-than-expected earnings, compounded by CEO Robert Yellowlees' remarks blaming Wall Street's expectations.
also features an interview with Scott Merlis, a managing director at
Wasserstein Perella Securities
who studies the auto industry. He forecasts another strong year for U.S. automakers. Hence, his stock picks:
Delphi Automotive Systems
it is not negotiating to buy a stake in
. The airline denied a report in the
of London that it was in talks to bring Virgin into its partnership with
Delta Air Lines
David Rheingold is a New York-based freelance writer. At the time of publication he had no positions in any of the securities mentioned, although holdings can change at any time.
The Open Era: Andover.Net Readies Itself for IPO, Hambrecht Style
11/14/99 6:39 PM ET
Open source meets
. An investment bank devoted to democratizing the IPO process handling a company devoted to an operating system created by a community of developers. Sounds like a great match, right?
Maybe not. On Dec. 7 legendary banker Bill Hambrecht is scheduled to once again try to use his OpenIPO system to bring a small company public, in this case
content Web site
. But given
rocky IPO track record and Andover.Net's shaky foothold in the sizzling Linux sector, the deal faces long odds of becoming Hambrecht's breakout success.
Like Hambrecht's first two offerings,
, Andover.Net is a niche player. Incorporated in 1992, the Acton, Mass.-based company owns a network of Web sites, including
, a pair of news and information sites devoted to Linux, the open-source operating system. It caters mainly to programmers who use open-source software. Like most Net companies, it's deep in the red, reporting a pro forma loss of $11 million on $2.6 million in revenue for the year ended Sept. 30.
Andover.Net declined to comment, citing the quiet period.
Tip of the Hat
But it's in a very hot niche. A
slew of Linux-related offerings are getting ready to hit the public markets following Linux distributor
spectacular 270% first-day pop on its Aug. 11 IPO. Similarly, Linux hardware company
saw a 482% leap when it went public on Nov. 5.
As a result, analysts and investors are buzzing about Linux, and any offering associated with the open-source movement will have its supporters. "I think it'll be
Hambrecht's most successful IPO so far," says Ken Fleming, analyst with
IPO Plus Aftermarket fund. Citing policy, the fund won't disclose if it's planning to buy shares in the offering.
Even so, Andover.Net won't necessarily be the next Red Hat. Neither a hardware nor a software company, it seems to fall through the Linux cracks and in many ways is more of a straight dot-com offering. Hambrecht declined to comment on any aspect of the Andover offering.
Riding the Wave
Six months ago Andover.Net was a general information site for programmers, with sites like Web-building resource
Internet Traffic Report
, which monitors data flow on the Web. It turned into a Linux company this summer when it acquired Slashdot in June and Freshmeat in August. And though the two sites are strong properties, the acquisitions prompted Linux developers to question whether Andover is just trying to capitalize on the hype surrounding Linux.
"Andover decided they were going to be a Linux company six months ago and started buying Linux Web sites," says Jonathan Corbet, a programmer who edits the
Linux Weekly News
. "I think they're trying to ride the Linux wave in general."
Andover "wasn't really known until it ponied up money and bought Slashdot and Freshmeat," adds Hadar Pedhazur, founder of the
Verticality Investment Group
venture capital firm and an active member of the Linux community. "Without taking that step they wouldn't be talking about an IPO now."
Chances are it'll take more than a little-known dot-com to improve 21-month-old W.R. Hambrecht's track record. Ravenswood Winery, a California vintner that was the first to test OpenIPO's unconventional Dutch auction
setup, hasn't ventured above 11, which is just a hair above its 10 1/2 offer price on April 9. The stock closed Friday at 10 5/8. "Historically wine stocks don't move much," said Hambrecht spokeswoman Sharon Smith.
It didn't help investors' confidence that W.R. Hambrecht itself has taken on about 600,000 shares, or 13% of the company. It's unusual for underwriters to use their own capital to support offerings in the IPO aftermarket to that degree. "We think it's a good long-term investment," says Smith.
Salon.com, the San Francisco Internet publication that went the OpenIPO route on June 22, has fared less well. It opened below its 10 1/2 offering price and hasn't recovered. The stock closed at 6 5/8 on Friday, 37% below its offer price. "Salon is a little harder story for investors to get their arms around since it's an online magazine and Internet content company," Hambrecht's spokeswoman explained.
Hambrecht's third offering was
, an online gourmet food delivery service that postponed its
offering in August due to market conditions and has since fallen off the IPO map. According to Hambrecht's Smith, the company pulled its IPO after receiving private financing. GreatFood.com declined to comment for this story.
But if the prospects for Andover.Net don't look great, at the very least OpenIPO should allow Linux developers to get in on the IPO. That may satisfy some people who complained they were shut out of the Red Hat IPO in August.
Copyright 1999, TheStreet.com