Ben Holmes Chats on Yahoo!

Ben offers advice on upcoming IPOs, including Women.com and Akamai. Plus, how to get into the market and what to do when you get there.
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Ben Holmes chatted on Yahoo! on Thursday, Oct. 14, at 5 p.m. EDT. As with all chats, this transcript is unedited.

bholmes_tsc:

I'm ready, let's get started!

daytrader123 asks:

Do you like plrx...online pharmacy ipo from last week?

bholmes_tsc:

Not as much as DSCM -- PLRX doesn't have the revs or the partnerships that Drugstore has.

dkuhel asks:

Why can I never get an IPO on E-Trade? Is it really random?

bholmes_tsc:

You're just competing with so many other users -- keep trying

bohmz99 asks:

Hello I'm looking to get into the market. Would I want to buy an IPO right away?

bholmes_tsc:

Know the rules before you get involved -- do your homework.

dkuhel asks:

What is the best way for the small investor to get in on an IPO

bholmes_tsc:

There are so many factors -- you need to choose a broker who is willing to work with you, it's all about relationships.

shulmanfund asks:

How do you see the IPO market from now until January?

bholmes_tsc:

The supply is good -- the quality is there -- I like the market at least till then.

Joe_aet asks:

Ben, if you could only read one section of an internet prospectus, which would you pick?

bholmes_tsc:

There are at least three you SHOULD read: balance, summary and Shareholders list AT THE MINIMUM.

mustahid asks:

How do we locate local brokers who might have access to ipo and who will actually talk to small investors?

bholmes_tsc:

Your best bet is to call a local branch and talk to the sales manager -- he or she knows who will deal with you.

LAHmiller asks:

Can you recommend a sell strategy for ipos when you need to hold them for 60 days (broker req)? Bank profit, sell loser, hang onto laggerd until recovery?

bholmes_tsc:

Always cut losers and ride the winners -- the trick is to set tight stops and stick to your plan.

cloverdale99_1999 asks:

Do you speak directly to any syndicate desks and if so do they give you the straight stuff?

bholmes_tsc:

All day -- they either love me or hate me (depends on the quality of their deal flow -- grin)

chukdotcom asks:

Why don't you use % predictions for IPO pops? Isn't that more accurate?

bholmes_tsc:

Tough question -- we've tried both and people hated the % reads.

Joe_aet asks:

Ben, do you think this internet ipo craze will end soon?

bholmes_tsc:

Eventually, right now we need for the supply to dry up a bit -- demand will follow and we can continue to play.

mustahid asks:

Talk a little bit more about AKAMAI - what's so special ??

bholmes_tsc:

AKAM is a huge idea and the guys behind it are smart as whips. These big, scalable ideas are what turn into world leaders.

asahliliman asks:

What's importance of Shareholders list?

bholmes_tsc:

The people behind a deal -- VCs, partners, etc, are important in that they bring relationships to small companies.

shulmanfund asks:

Ben, what types of factors go into your ratings of an IPO?

bholmes_tsc:

Gosh, everything -- the business, comps, the balance sheet -- we look at everything.

boots123 asks:

It seems like today if you can't get in on a hot internet IPO, you might want to short it after its initial run up. Comments on this strategy?

bholmes_tsc:

Short inside of 30 days and you are breaking the law.

choosyg asks:

What new IPOs do you think will do very well in the aftermarket?

bholmes_tsc:

We call them "Buy an Holds" -- they're noted on our website.

mike_3011_99 asks:

Ben it is Mike in Miami one of your loyal subscribers, what is your thoughts on JNI Corp.

bholmes_tsc:

JNI has profits! That's the magic smoke for a deal.

mar33t5 asks:

When are you coming to Argentina?

bholmes_tsc:

Ha! Ummm, no.

investmanflips asks:

Ben, what are the key factors you focus on in forming your predictions of Day 1 IPO performance

bholmes_tsc:

We just covered part of that -- Buzz is probably the biggest day 1 factor.

chukdotcom asks:

Why is 5+ your highest ranking? Isn't that a bit of a cop out?

bholmes_tsc:

Because, and you'll learn this after you've been through a complete cycle, any scale we use has to stand up in a cold market as well as a hot one.

flipmenot2 asks:

How do fund managers react when a deal goes in the hole day 1?

bholmes_tsc:

Sell! Sell it all!

coloneljulius asks:

Is Schwab going to get into the IPO business?

bholmes_tsc:

You mean as an underwriter? I doubt it.

topannuity asks:

Ben-Are there any pure play IPO funds which get allocations at syndicate price levels? Are the underwriters willing to sign off large chunks of IPOs to such funds?

bholmes_tsc:

These funds have traditionally lagged -- look at the new fund out of Hambrecht -- they certainly have the ability to do it if anyone can.

shulmanfund asks:

Does ipopros have any competitors?

bholmes_tsc:

Ha! They probably think that they compete (grin) -- we think we lead.

gstrfbull asks:

BEN how do you determine BUZZ? Do you call the brokerage houses.. talk to your clients.. what?

bholmes_tsc:

All of the above -- a lot of whisper numbers come through our shop in a day.

asahliliman asks:

What underwriters do you think are doing the best job?

bholmes_tsc:

Morgan Stanley, Robertson, Weisel

choosyg asks:

What are the best web sites for providing recommendations about which IPOs to buy?

bholmes_tsc:

www.ipopros.com and thestreet.com (grin) What do you think I would say?

cloverdale99_1999 asks:

Do retail investors really flip more than institutions

bholmes_tsc:

We all flip, right?

mustahid asks:

Your history is predicting ipo's pretty impressive ... any institutional investment firm use your site for guide??

bholmes_tsc:

Yes, we sell to a number of the money mgmt houses and an armload of hedge funds.

darkfantom7 asks:

Ben, you seem quite high on eMed Technologies while many people seem down on it....Why did you give this deal a 5+?

bholmes_tsc:

Again, a big scalable idea AND the idea is taking root. Their install base is growing at internet speed.

topannuity asks:

Ben--do you receive allocations of IPOs? Do you go through the same 'indication of interest' process the rest of us peons here go through?

bholmes_tsc:

I do not trade anymore -- I feel like it would put me in an awkward position if I call deals and buy them at the same time.

shulmanfund asks:

How can you explain foundry's IPO?

bholmes_tsc:

Foundry was just a moonshot -- profits, great products and a hot market at that time.

mike_3011_99 asks:

How long do you have to hold an ipo before you can sell it without being punished by your broker

bholmes_tsc:

That is a dealer specific number -- ask the firm you are dealing with.

laura_the_street:

Well what about "the man", how will a quick turnover affect my taxes?

bholmes_tsc:

Capital gains are the bain of the flipper -- trade hard and taxes just become a barometer of wealth.

gatorvet97 asks:

I have a tremendous amount of cash now in IWIN, FOB and TZIX.....would you flip these or hold?

bholmes_tsc:

You should have been out of FOB months ago. Cut losses.

shulmanfund asks:

Why haven't online shopping places (shopnow, etc.) had much success?

bholmes_tsc:

The space is very crowded and buyers want something that is either a first mover or very unique.

laura_the_street:

A chatter asks what's your favorite flower?

bholmes_tsc:

The columbine

topannuity asks:

I've got a big idea. What's my first step in taking my dream public?

bholmes_tsc:

Start your business and make some money first. The public markets are not a venture capital source.

shulmanfund asks:

Does the lead underwriter have an effect on buzz?

bholmes_tsc:

Absolutely -- some of these firms are like buzz factories

asahliliman asks:

What do you see as hottest IPOs between now and end of year?

bholmes_tsc:

Akamai, CROSSROADS SYSTEMS INC (you heard that here first) and Martha!

mama_doodle asks:

What is your opinion on the upcoming Charter Communications IPO?

bholmes_tsc:

A very very big offering -- good backers will carry it so far but again, that's a lot of stock to float.

coloneljulius asks:

Why do you think Schwab won't get into the underwriting business?

bholmes_tsc:

Underwriting takes talent -- who is going to go work for Schwab when they can go to Robertson or Goldman?

ChopOMatic asks:

Ben, Chop here. Good to see you. Question: Why don't you and other experts go out a little further on the limb when predicting the performance of an IPO? After all, +5 is awfully broad. That would categorize GDEN and RHAT exactly the same.

bholmes_tsc:

Again, the scale has to work in all environments -- not just hot ones.

IPO4Profit asks:

You don't like the WWF IPO?

bholmes_tsc:

Ummm... I like the deal -- they make money and they are growing. Wrestling is real, right?

Glubman asks:

How does one find out the dates of upcoming IPOs?

bholmes_tsc:

Send me an email at timing@ipopros.com and I'll send you a great article (which I wrote) about timing.

SouthParkCarl asks:

What do you think of the drop in TSCM stock after it's over-hyped IPO?

bholmes_tsc:

Gee thanks.... hot seat time... TSCM needs a couple of quarters to build their business -- be patient (how's that Cramer?)

grindjv asks:

Do you know if Netstockdirect is planning an IPO?

bholmes_tsc:

I have no idea.

ChopOMatic asks:

Ben, where would you recommend sending a great investment article that I wrote?

bholmes_tsc:

Send it to me if it's on IPOs, if not to Dave Kansas at TheStreet.com.

flipmenot2 asks:

Ben, does PCQT look like its in deep trouble?

bholmes_tsc:

I'm starting to hate this deal -- there I've said it -- Now Pru can go back to hating ME!

WSCFan asks:

How does the calendar for IPOs this quarter compare to last year 4Q?

bholmes_tsc:

Last year this time we were in the deep freeze -- EBAY pulled us out and then cam EWBX -- the rest is history, we've been running like scalded dogs ever since.

Glubman asks:

Ben where can you find out about international IPOs that will trade as ADRs?

bholmes_tsc:

My site, or any of the IPO sites.

SouthParkCarl asks:

Then what do you think of Webvan and the 25M float and now the SEC cooling off period fiasco?

bholmes_tsc:

Big idea, big bet -- if it works it'll be huge, if not it will crash hard. Goldman should have curbed that language, they didn't and now they've been curbed.

safariwired2net asks:

Ben, what do you think about Quicklogic?

bholmes_tsc:

I like the deal -- it comes tonight for tomorrow.

AdrieneJ asks:

Are you still "hot" on EMDT and Quik and what are your thoughts on Martha Stewart?

bholmes_tsc:

EMDT we covered, Martha I love. She's the champion of cool stuff. I like the MSO deal for maybe 20 - 30%

DuckFan34 asks:

What do you think the future is on Open-IPOs now that Keith Companies is buying back stock after it's ipo?

bholmes_tsc:

I think the open IPO kills the profit margins of the other 99.999% of the underwriters -- do you think they'll help that process gain ground?

shulmanfund asks:

Have you thought about going public with ipopros?

bholmes_tsc:

Every day -- then I lay down and it goes away.

zjk_1999 asks:

ANY THOUGHTS ON DEJA.COM .....and WHEN MIGHT WE SEE IT ISSUED?

bholmes_tsc:

Deja is a great resource -- very unique. Will it work? Probably.

Joe_aet asks:

Ben, I enjoy your service, have you considered posting more of your rating criteria for each ipo?

bholmes_tsc:

We're expanding the commentary on each deal as we speak.

asahliliman asks:

How about Women.com tomorrow?

bholmes_tsc:

They should have come back in the summer -- a small premium, but the mystery (and the buzz) has been cleared up by IVIL having traded first.

SouthParkCarl asks:

Ben, you left out Sycamore in your hot IPO list for the remainder of the year...did you forget or do you think Akamai, Crossroads, and Martha are better?

bholmes_tsc:

No, Sycamore is still hot -- is it a double or triple? I don't know yet.

AdrieneJ asks:

Opinion on UPS....thanks.

bholmes_tsc:

UPS is a BIG brand name and a known quantity as far as their model -- should be a great stock.

dkuhel asks:

Webvan makes too much info public and puts IPO on hold. Why do only the investment houses get full disclosure?

bholmes_tsc:

They wear better suits then you and I do? I don't know. I've been to many roadshows and it's a circus.

jensencv asks:

Ben, What are your thoughts on about.com?

bholmes_tsc:

Losing big $$$, good underwriters but nothing unique about the idea.

gstrfbull asks:

Ben do you think that TZIX can go to 100?

bholmes_tsc:

I don't know.

mustahid asks:

I've tried the 2 free weeks from ipopros.com ---very impressive. Ben u feel u can keep the good work even if the markets heads south

bholmes_tsc:

I do my BEST work in a bad market. My job is to keep you from stepping on sharp things.

EddieBerman asks:

What are your thoughts on INIT (Interliant)?

bholmes_tsc:

Hosting is a good business, but is crowded. They're going to have to work hard to keep growing.

Starmed asks:

What are your thoughts about VIXEL and the whole SAN area

bholmes_tsc:

SAN plays are hot -- Gadzoox, etc -- look at Crossroads (hint) -- VIXL is a good company, the stock? anyone's guess.

julspear asks:

Isn't webvan's huge float the same as having a $50 sticker price?

bholmes_tsc:

Clearly the deal is valued on its potential -- again, if it works it works big, if not there will be much pain.

SouthParkCarl asks:

Ben, some of us here in your chat really follow the IPO market to the best the web information can offer, if you go public, can we be writers/regulars on your site?

bholmes_tsc:

Sure, I need help!!! I could especially use a spell checker...

humansand asks:

Ben, would you please explain the day 25 hype thing, and does it cause a pop in most ipo's?

bholmes_tsc:

That's the quiet period you are talking about... it can. There are no promises, but if there is a good report written it can boost the stock.

DuckFan34 asks:

A lot of GS deals have been breaking lately...have they lost their touch?

bholmes_tsc:

Goldman is a good year round player -- nobody bats 1000 all of the time.

chukdotcom asks:

Will Wit Capital succeed in shaking up the old boy IPO club?

bholmes_tsc:

WIT scares me -- they promise a lot, but fall short in silly things like CUSTOMER SERVICE!!!

caiapo_99 asks:

Ben: I am a young investor, I am 22 and I already have access to various prospectuses, some only available to sophisticated investors, what do you think about young people getting into IPO's? Is it positive for the companies or should the info be kept among people with more experience?!

bholmes_tsc:

You are the best time in your life to invest aggressively -- IPOs are certainly aggressive.

topannuity asks:

Why have ABTL and AWEB flopped? These are great ideas which the cos. are implementing well?

bholmes_tsc:

Car buying just doesn't translate well to the web (in my opinion) People like to sit in and touch cars.

EddieBerman asks:

Will the Friedman Billings group ever amount to anything

bholmes_tsc:

FBR had its day -- the web just may not be what they expected.

gstrfbull asks:

Ben what happens when an IPO breaks syndicate bid.. Do the lead/co underwriters take some financial repercussions when this occurs?

bholmes_tsc:

They usually just walk away -- if a deal breaks hard -- 20 or more % -- they can rescind (take back) a deal.

hd7000 asks:

Any thoughts on eMed Tech for us late comers?

bholmes_tsc:

The deal works -- buy it at the issue and be happy, do not chase ANYTHING in the aftermarket, you'll get hurt.

topannuity asks:

What have QUOT and INSWEB performed so poorly?

bholmes_tsc:

They did their thing up front and then just faded -- move on.

asahliliman asks:

How do you think Agilent will do?

bholmes_tsc:

The HP spin-off -- it can go either way, but I like the size of their revenues and profits.

mama_doodle asks:

What do you think of the VA Linux Systems IPO?

bholmes_tsc:

VA is a serious player -- we like, no we LOVE the deal.

jensencv asks:

Ben, I've been hanging on to DIR. Time to sell?

bholmes_tsc:

DLJ Direct is a long term play -- I think you make money in the stock over time.

tcalichi asks:

What do you think of etickets? Are deals that take a long time to go public bad news? Such as this and WebVan?

bholmes_tsc:

Deals that drag or get postponed forever scare me.

EddieBerman asks:

Did you expect Phone.com to do as well as it has, and any other thoughts on it?

bholmes_tsc:

Telephone over IP is a great idea -- I was not a fan, but I'm being converted.

studk2 asks:

Do you like the bulls?

bholmes_tsc:

I'm a Lakers fan -- but I admit the Bulls rock.

laura_the_street:

What's your prediction for the World Series?

bholmes_tsc:

Hello to my sons Harrison and Sherman

bholmes_tsc:

I don't have time to watch sports -- you're email and phone calls keep me here at all hours.

laura_the_street:

Thanks for joining us today.

bholmes_tsc:

You people were great!