 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Join HyperPumper's Yahoo! Club. It's completely FREE and anonymous!
HyperPumper is making a baby gorilla list and checking it twice.
Want HyperPumper to add your favorite undiscovered baby gorilla to his strong buy list? Or to write about it in his daily column?
Don't worry. HyperPumper will never use your return Email address to spam you.
Friday March 17, 2000: 6pm EDT
Clean out the fridge. Peapod is wilting.
Yesterday, its chief executive and president, Bill Malloy, hired just six months ago from AT&T, resigned due to unspecified health problems. Four angels - Apollo Management, Yucaipa Companies, Pequot Capital Management and GRP II - took the occasion to empty their fridge and pulled out of the deal to deliver $120 million into the company. Delivery cancelled.
This leaves Peapod with just $3 million in cash -- a mere weeks, if not days, of life.
Even before the open, Peapod shares crashed, falling 50 percent yesterday to close at $3.72. The Peapod statement quoted in Reuters was not reassuring: "There can be no assurances that the company will be successful in finding or completing a transaction or that the company's resources will be sufficient to enable it to continue its operations during this process."
This sounds to HyperPumper like doctor's code for "It's time for last rites. You can get good rates at www.funeral.com"
Remember Boston Chicky? Iridium?
The Peapod debacle may inspire a fresh round of etail bashing. CBS MarketWatch linked other e-commerce flops to Peapod's decline. "The announcement comes as a number of online retailers have seen their valuations, as well as their general appeal, slowly fade," CBS MW opined. This comes at the heels of the fizzled plan by Time Warner and Sony plan to merge Columbia House with CDnow, as well as "management shakeouts" at Value America and Beyond.com.
The e-retailing backlash is in full swing. Even finanically sound companies like Egghead.com and Amazon.com seem to have been hit by the recent etail backlash.
That ugly M word.
Peapod's difficulties cast a shadow on a sector whose profit potential many analysts have questioned for some time. Online food merchants must try to jump to a profitable model without expending their financing too quickly. Peapod's failure will cause investors to think twice before pouring additional funds into the grocery business.
HyperPumper has never been a Peapod fan. From the start, HyperPumper has questioned the profitability of the delivery business. The delivery business is an old economy truck 'n mortar business -- not a Net business.
Can anybody say "Gasoline at 2 bucks per gallon?
There is no economy of scale in the delivery groceries. The more customers you have, the more labor, storage, and gasoline it takes to make deliveries. Simply put, it is hard to see how Peapod can ever make a profit unless it signs up every single house on Long Island to deliver not just groceries, but every thing else from toys to clothes.
Could happen.
But what are the odds of Peapod accomplishing this?
Peapod has never been a leader in management. It's management team has turned over so many times in its brief existence..
On the brighter side, Peapod's stumble could be a boon for other online groceries and food purveyors. Webvan's pockets are deep, and it continues to expand into new markets. Kozmo.com's online delivery service is growing by 40 percent per month in the five markets it serves. These players are now in a position to buy � at a much-discounted rate � Peapod and its customers, infrastructure and knowledge.
10 cents on the dollar.
Earlier this week, HomeGrocer IPO'd and hyped 18 percent by the end of its first trading day � a fairly low bump for an Internet stock. But shares in every public etail company have fallen in recent months as investor interest has weakened. Analysts have pointed to the high cost of setting up physical distribution centers as companies expand to new cities, and the expertise needed to arrange difficult logistics for home delivery.
It was obvious to HyperPumper that Peapod was in trouble before Mallory made his decision to split. Even as consumer purchases on the Internet has skyrocketed in the past year, Peapod revenues have fallen off.
Fallen with a capital F.
For the first nine months of 1999, Peapod posted $51.5 million in revenues, down slightly from the same period a year ago. The company has lost $19.3 million so far this year. At the same time, Peapod increased spending in order to try and remain competitive. It spent $2.5 million for a signing bonus to land Malloy, a former AT&T (T) executive. Its costs in fulfilling orders increased 21 percent for the first nine months of 1999.
Another bad choice in a sequence of bad mistakes.
Malloy is vacating the roles of CEO and president due to health reasons, the company said. Current Chairman and cofounder Andrew Parkinson will assume the position of CEO. Investors pledged the financing on Feb. 14, but they terminated those promises today, Peapod said. With just $3 million in cash on hand, the company retained Wasserstein Perella & Co. (not on HyperPumper's list of top 10 banking firms) to look at alternative sources of financing or a possible sale.
Peapod faced new competitors this year, including NetGrocer, HomeGrocer and Streamline. In early November, the company said it might not be able to secure funds to continue operations beyond the third quarter of 2000.
Pssst: HyperPumper likes RNWK, eBAY, and CMRC next week.
Thursday March 16, 2000: 3am EDT
The theory goes like this. A great amount of tech stocks -- that's Net and BioTech stocks -- are owned by small investors on margin. If the Nasdaq suffers a 18% drop (and it's already down 10% from its highs), these small investors will to get margin calls they cannot meet. They will be forced to selloff, which in turn will push tech stocks prices down even further. This will trigger a chain reaction of margin calls and more selling.
The selling frenzy will not stop until every margin investor is flushed out. The margining started at Nasdaq 2500, so Nasdaq 2500 is the only "safe" place to jump back in.
Just some food for thought. This could happen. But HyperPumper feels life is not worth living without risks. And this is one risk HyperPumper is going to take.
Suck it in and hold on folks.
Wednesday March 15, 2000: 3pm EDT
Online Auctineer eBay Wednesday launched an new exchange for the small business market. Focused on office products and professional tools like computers and software, the new Business Exchange was introduced in quick order response to strong demand.
eBay was originally set up as a site where individuals could bid on consumer items and collectables. But it has always attracted small businesses who saw eBay as a natural way to efficiently sell office and other semi-commodity equipment to the mass market.
The other major players in this market include Egghead.com (surplus auctions, software, music, and travel packages); Yahoo! Auctions, and Amazon.com.
``Business Exchange is a natural evolution of the eBay business model, enabling businesses to obtain new, used and refurbished business merchandise, and providing businesses of varying sizes a targeted way to reach buyers of business items,'' Chief Operating Officer Brian Swette said in a press release. Swette declined to estimate the size of the business-to-business trading market, other than to say it was ``huge.''
HyperPumper likes Oracle today.
Tuesday March 15, 2000: 5am EDT, before the bell
EBay shares surged more than 14 percent in after-hours trading Tuesday after CNBC reported that the popular auction site has been in hot and heavy dating with YHOO. Their consorting could lead to an alliance that could lead to wedding bells.
YHOO shares also rallied in after hours trading before pulling back.
YHOO last year bought Geocities and Broadcast.com, but have not made any acquisitions since then. The Financial Times is reporting this morning that the talks may have broken down, perhaps over valuation issues.
Spokespersons for Yahoo and EBay declined to comment on the report, which cited people familiar with the situation. A takeover of EBay at its current price would cost some $31 billion. EBay shares traded on an all-time high of 241 on the Island ECN late Tuesday, after closing at 211 in regular trading, up 1 1/4. Yahoo shares rose to 172 1/2 from a close of 168 3/4 in the regular session, down 7 1/16 for the day.
London's Financial Times reported late Tuesday that the two got together last week but negotiations had broken down.
Market speculation that the two Internet giants would get together have circulated for some time. The speculation started early this year, when America Online announced a merger with Time Warner. The deal combined the largest Internet access provider with the world's largest media organization. HyperPumper wondered then whether Yahoo would buy a media company. Yahoo officials said the company had no plans to follow that path.
What else could they have said at the time?
HyperPumper believes a takeover would benefit both companies. HyperPumper believes that what EBay needs is an even larger audience to accelerate the buying and selling end of their business and Yahoo can give it that giant, insurmountable international audience. In 5 languages.
Yahoo! wants a service that will add eyeballs for a longer time, allowing the portal to move forward in its mission of connecting anybody to anything. Combining the Yahoo! FREE auctions, shopping, and financial management facilities with eBAYs elite auctions also has many valuable synergies.
The EBay Gorilla is why Yahoo and others attempting to enter the Internet auction market have been unsuccessful. eBay has more buyers and sellers than anyone else and they will continue attrracting more buyers and more sellers who are interested in finding the largest audiences for their products. Current YHOO auctions is second tier, and partnering with eBAY will allow YHOO to be first tier in this important arena.
All in all, it appears to HyperPumper that it would be more appealing for YHOO to buy or partner with EBay than to fight this auction Gorilla. EBay has shown they are the best of class in C2C auctions and have built a dominant market position. Everyone who has come up against them has failed, so it makes sense for YHOO to partner rather than compete with them.
In summary, HyperPumper is very happy today he is long both eBAY and YHOO.
Tuesday March 14, 2000: 3am EDT
I think it's safe to say that some B2B firms are going to show the types of spectacular we gave all come to expect of Net companies. Most of HyperPumper's B2B holdings are already 10-baggers over the last year. Yup. HyperPumper actually LIKEs high valuations in his stocks since it's an indication HyperPumper is onto something. Big. HyperPumper's Golden Rule is to buy stuff only if HyperPumper thinks it will be a leader in an industry that will add the most value to the global economy over the next decade.
While researching and writing about B2B, HyperPumper couldn't help but think that B2B has many of the qualities that HyperPumper looks for. B2B is HyperPumper's "type", baby.
Yea, baby, keep it coming.
HyperPumper loves B2B's "Huge Growth Potential". B2B has dozens of different research firms publishing estimates for the years ahead. They have come to praise Ceasar. Yup. They all arrive at the same conclusion -- transactions between businesses over the Internet is going to be huge.
Size does matter.
The most quoted research firm is probably Forrester Research, and Forrester expects the value of goods and services exchanged online B2B to go from approximately $130 billion last year to near $1.5 trillion by 2003. In other words, there's absolutely no doubt B2B has a mongo growth curve.
The prospects for B2B appears unlimited. Economists call it the Spillover Effect. The greater the industry grows, the greater the likelihood it will grow even more.
The Spillover Effect.
HyperPumper believes this perfectly describes the B2B industry. B2B companies of all shapes and sizes are aimed at making the interactions between businesses much more efficient. What company on this planet cannot benefit from increased efficiency and reduced expenses?
DU-UH!
How B2B works may not be something the average Joe investor can readily see on the surface, but everyone'll benefit as companies are able to produce more products more cheaply. Less cost. Save money. The ways in which smart B2B firms can use the Internet to make business processes more efficient is really only limited by their imagination.
Morph potential.
Can B2B morph into something more than "just" B2B?
Or will it just plateau after dominating the world and giving HyperPumper a 10 bagger?
A 10 bagger is not enough. Not for HyperPumper.
The possibilities for adding value by cutting this fat is nearly immeasurable. There is so much fat.
Remember that "$1.5 trillion by 2003" figure quoted earlier? That's for domestic B2B e-commerce. Extend that to international markets and the addressable market size is probably well over $2.0 trillion by 2003. And that's only if China and Russia do not grow.
What if the chinese or russian economy explodes?
HyperPumper isn't even going to venture a guess as to what the global size of B2B e-commerce will be 10 years from now. It's safe to say that the vast majority of businesses are going to be online by then. HyperPumper thinks that B2B e-commerce is an industry that is worth further consideration for your investment dollars. Here are a few of HyperPumper's pix: Commerce One (CMRC) I2(ITWO) Ariba(ARBA) Egghead.com(EGGS) Vitria (VITR) Real Networks (RNWK) FreeMarkets (FMKT) Ventro (VNTR)
As for the eBAY & YHOO merger, HyperPumper likes eBAY. Either way, eBAY is a short term strong buy. Get in now! The German arm of eBAY is bigger than YHOO's worldwide operations put together. Hot damn!!
Sunday March 12, 2000: 9pm EDT
Warren Buffett. The very name conjures up a reassuring image of a ruffled, beneficent billionaire. Warren E. Buffett. The Oracle of Omaha. The Larry Ellison of Nebraska without the insecurity.
Buffett graded himself a 'D' in an annual letter to holding company Berkshire Hathaway shareholders released yesterday.
A D?
HELLO?!!
Is it grade inflation? Should Mr. Buffett be trusted to grade himself fairly?
The company's holdings include Dairy Queen, Geico Insurance, Coca-Cola (KO), Gillette (G), Disney (DIS), and American Express (AXP).
Baaaarffff!
HELLO! Can HyperPumper's monkey come up with a worst portfolio?!
Mr. Warren E. Buffett. Don't flatter yourself. YOU DESERVE AN F.
Fuck.
That's what your shareholders are saying under their breaths. No kidding, Mr. Buffett. Especially those shareholders who could have used the money they entrusted to you to buy Qualcomm, ISSX, CMRC, DCLK, and CMGI over the past year.
Berkshire Hathaway shares are down more than 40 percent in the past year. That's after barely matching with the S&P500 the previous year. Shares of Berkshire Hathaway 'A' shares fell 1000 to 41300 on Friday. Its 'B' listed shares dropped 30 to 1370.
But Mr. Buffett was not afraid to keep his chin up and keep on spinning. The billionaire used a little humor to try and deflect the sour returns. But the numbers do not lie. Berkshire experienced a 45 percent drop in earnings to $1.557 billion, or $1,025 per share vs. $2.8 billion or $2,262 per share in 1998.
Saying it was his company's worst performance to date, Buffett referenced the bumbling character from the Peter Sellers "Pink Panther" movies. "Even Inspector Clouseau could find last year's guilty party: your chairman," Buffett said in a letter posted on his company's Web site. "My performance reminds me of the quarterback whose report card showed four Fs and a D but who nonetheless had an understanding coach. 'Son, he drawled, 'I think you're spending too much time on that one subject.' "
Excuse me, Mr. Buffett, what exactly have you been spending your time on?! Ignoring the Internet? Ignoring Microsoft? Software is not here to stay? Email is a passing fad?
Maybe you should be spending some time upgrading your knowledge of economics. The stuff you learned 40 years ago seems to be getting a tad bit dated.
A tad bit.
True to form, Buffett continued his homespun storytelling. Warm and fuzzy stories has worked in the past to explain away mistakes. For Mr. Buffett's older clientele, these stories may continue to stem bloodletting. For a moment, anyway. Like this tearjerker:
"Berkshire's collection of managers is unusual in several important ways. As one example, a very high percentage of these men and women are independently wealthy, having made fortunes in the businesses that they run." Mr. Buffett wrote. "They work neither because they need the money nor because they are contractually obligated to -- we have no contracts at Berkshire. Rather, they work long and hard because they love their businesses."
HyperPumper has a different philosophy. HyperPumper prefers to invests his money on LEAN, HUNGRY managers -- poor managers who have their entire life savings invested along with HyperPumper's money. You know, like the lean and hungry kids working at MPLX, CMRC, and FMKT? But apparently, Mr. Buffett prefers to invest with already-rich fat cats who don't need any more money. Seems to HyperPumper that this is a mighty poor investment strategy. You see, in HyperPumper's experience, the lean, hungry workers tend to work harder.
DU-UH!
Mr. Buffett continues, "Charlie and I try to behave with our managers just as we attempt to behave with Berkshire's shareholders, treating both groups as we would wish to be treated if our positions were reversed. Though "working" means nothing to me financially, I love doing it at Berkshire for some simple reasons: It gives me a sense of achievement, a freedom to act as I see fit and an opportunity to interact daily with people I like and trust. Why should our managers -- accomplished artists at what they do -- see things differently?"
HyperPumper begs to differ, Mr. Buffett. HyperPumper expects his managers to meet goals and kick some butt. HyperPumper is not here to support a bunch of "artists." HyperPumper is here to get results.
Dammit.
Mr. Buffett, do you think KO cash flow is guarranteed? Sugar water is here to stay? Everybody loves sugar water, rest assured. Sugar water is more essential to life than Email?
Then you must believe HyperPumper and his friends are going to sell their ISSX, CMRC, MPLX, DCLK, TVLY, and YHOO to buy shares of a sugar water company that will soon make a comeback.
NOT!
Sawrrry Charlie.
P.S. HyperPumper loves eBAY's move into used car auctions. eBAY is very primed to move upwards short term and split at the next earnings. Strong buy now!
Friday March 10, 2000: 4:30pm EDT, after the bell
Damn Cramer. Can't thestreet.com find its own stock to hype?
HyperPumper doesn't subscribe to thestreet.com (hey, we do our own research here, and we trust our own judgements--and besides, the Yahoo! message boards are free; why pay?). But it sure looks like thestreet.com put out a nice article on MPLX today. One day right after HyperPumper added it to his strong buy list. Again, MPLX is Must Buy.
MPLX just got a new CFO earlier this week, Michael Stanek. To those who are not in this business -- Mr. Staneck is an influential senior analyst for Lehman Bros. (Yes, Lehman is one of the 3 firms that likes MPLX.)
What is unique here is that Mr. Stanek has agreed to quite his job at Lehman and join MPLX full time. It is highly unusual for an analyst to like a company so much he would quit his job over it! He must be convinced that this is a company that has a vast potential, and he has shown that conviction by hiring on.
All signs up good, Mr. Spock! Warp Speed 9.
*******************
Thursday March 9, 2000: 6pm EDT: after the bell
For the lawyers: HyperPumper's calls are for entertainment purposes only, so back off you greaseballs!
What's next? HyperPumper is working on an article about Berkshire Hathaway. Where's the beef?!
*******************
Thursday March 9, 2000: 1AM EDT: before the bell
Merger or Partnership?
In case you missed it, the Wall Street Journal, New York Times, and Associated Press all cited this week's New Yorker in their reports earlier this week that talks are on. Yahoo and News Corp. insist that no one is buying anyone, there's just some healthy cross investment. News Corp. says it's talking to anyone and everyone about its new venture to combine its satellite properties into one unit.
It's just like dating.
Yahoo! prides itself as an independent, agnostic Net telephone directory. Come one, come all. But in the alliance-happy atmosphere of the Net, if you don't mate quickly, you could find yourself overwhelmed by breeders. Very soon, Yahoo! plus one will make two.
The Journal's John Lippman said Yahoo would get satellite distribution around the world in places that are not wired for cable - such as Asia, Latin America and much of Western Europe.
Yahoo! HyperGrowth.
Yahoo would also get content from the Fox movie studio and TV networks. What would News Corp. get? Net credibility. Pizzaz. The right stuff.
Sizzle.
Hooking up with Yahoo would show investors that News Corp. is serious about delivering the Net from the sky.
Bottom line: HyperPumper believes this is a story waiting to happen. It is no longer if. It is when. And for how much. And in what form: partnership or all the way? That is the only question.
HyperPumper loves CMRC this week!
********************
Wednesday March 8, 2000: 2pm EDT
Sick of your Procter and Gamble? Wanna move it over to something less risky?
Cidera, Inc. (formerly SkyCache, Inc.), the Internet Broadcast Backbone, today announced an agreement with RealNetworks�, Inc., (Nasdaq: RNWK) the gorillia in Internet media delivery, for Cidera to deploy software integration solutions that enable transmission of RealNetworks RealSystem� G2 rich media content over Cidera's international broadcast overlay network. The licensing agreement between Cidera and RealNetworks allows content aggregators and producers who have licensed a RealSystem G2 RealServer to deliver broadcast quality RealNetworks streaming media through Cidera's Internet Broadcast Backbone without the need to add network hardware.
Cidera, Inc., an Internet Broadcast Backbone, is one of the major international players in the satellite delivery of broadband content to the edge of the Internet. That's the EDGE of the Internet. Cidera uses innovative high-speed satellite technology designed to transport high-bandwidth data faster, more reliably, and more efficiently. That's compared to ISPs, DSL, and Cable access providers. Cidera is expanding its international network infrastructure to improve the movement of Web site content, streaming audio and video, live webcasts, large databases, and Usenet News over ... what else? the Internet. Cidera serves more than 230 locations in North America and Europe.
According to the agreement, Cidera can now transport rich media content in RealNetworks formats, including RealAudio and RealVideo, directly to the ``edge'' of the Internet, bypassing congestion points and sources of latency on the public Internet. By distributing streaming media content to the edge -- the points where end-users gain access to the Internet -- Cidera can offer RealNetworks-enabled providers the ability to multicast a high-quality multimedia experience to their audience. Cidera's patented satellite delivery system has been integrated with RealNetworks RealSystem G2 to take advantage of the multipoint capabilities offered by Cidera.
This means increased speed at increased capacity for Real.
The overwhelming support of RealNetworks systems by both content providers and end-users made this an obvious service if Real is to provide the highest quality audio and video and rich media experience.
Cidera's integration works transparently with RealNetworks' RealServer 7.0, creating a software solution that ties directly into a customer's current infrastructure. Cidera engineered the software integration solution to eliminate the need for ongoing two-way contact between servers for the purpose of delivering content to the edge of the network.
``RealSystem G2 is designed to meet the increasing demands of delivering high-quality media content over the Internet,'' the newswires quote a RealNetworks spokeman as saying. ``Cidera has taken advantage of the robust extensibility of RealSystem G2 by adding a one-way satellite broadcast component that optimizes the media experience of end-users accessing content delivered through the combination of RealSystem G2 and the Cidera satellite broadcast network.''
Cidera has over 230 downlinks installed at ISPs in North America and Europe. In bypassing the sources of Internet congestion, Cidera's scalable infrastructure provides a higher quality of service than the service that is obtainable over typical terrestrial Internet content transit, and is well suited for very large live events.
What next? CNBC is reporting that ORCL is holding a press conference. More B2B news soon.
********************
Tuesday March 7, 2000: after the bell
Verisign today announced it would upchuck $21 billion in stock for the leading Net name registrar. What an ambitious move aimed at vastly expanding its core offerings! Or a bad mistake? VeriSign aims to be a financial/legal transactions hub -- a city hall of the Internet. But people still dismiss them as an encryption company. Another ISSX but not as smart.
It's all perception. $21 Billion dollars worth.
Building on Network Solutions' (NSI) domain name registration service may seem like an easy way to expand almost any franchise on the Net. But HyperPumper questions the exhorbitantly high price tag. $20 Billion bucks can buy you CMRC for Godsakes. Isn't CMRC a better transactions hub than NSOL?
Verisign essentially paid $21 billion for "a public mailing list, and that's all," one analyst mumbled.
Another analyst opined that the biggest advantage appears to be in cross-promotion. But crosspromo could have been worked out in a partnership deal. Hmmm. Although NSI may be well positioned to capture new business from small companies creating new e-commerce strategy, the deal does not look strong on the business-to-business front. Where's the beef?!
Investors doublepumped negatively to the news, driving down VeriSign's stock price by nearly 20 percent.
The accounting is also scary. Because the deal is structured as a purchase rather than as a pooling of interests, VeriSign will be forced to recognize the acquisition on its books through amortization charges that could amount to $1 billion a quarter for the next four years. Didn't they get primo accounting advice?
Why not a mere partnership agreement?
A mere partnership would have served some of the same benefits for both firms, but the $17 billion acquisition was necessary to serve the customer more completely? Yeah.... right.
VeriSign has been the most visibly touted issuer of digital certificates for the Internet but has recently experienced heightened competitive pressures. The company, along with rivals such as Entrust Technologies, GTE's CyberTrust and other firms, develops software to secure online transactions using Public Key Infrastructure (PKI) technology, as companies begin to conduct far more complex transactions over the Internet; PKI systems issue and manage digital certificates.
NSI was the monopolistic registrar of Internet addresses from 1992 until last spring. Then the Commerce Department approved the creation of new registrars to compete in the booming market. Before then, NSI operated as a monopoly under contract with the U.S. government, giving it exclusive rights to register coveted ".com," ".net" and ".org" addresses. Competition. The testing period for the new competitive system ended in November, opening to consumers more choices and better prices for obtaining an online identity.
There are currently about a dozen dozen (e.g. a lot of) registrars accredited by the body that oversees the Internet's address system, called the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is meeting this week in Cairo to discuss the possibility of introducing new top-level domain name endings such as ".firm" and ".shop."
What now for Verisign? Where is the M word for monetize?
VeriSign management created innovative business strategies in the encryption industry early on, offering encryption services on top of pure software packages. That decision helped catapult VeriSign to a stunning $22 billion market value prior to the merger announcement with NSI today. They have vision.
As entrepreneurs register Web addresses for their new businesses with NSI, they will get an offer for VeriSign's security system.
Does this facilitate (VeriSign's) movement forward into (business-to-business) e-commerce? VeriSign already has solid relationships in the business-to-consumer market for its security products.
And so it goes. Dow back to 10,000 in 2 months. But that's another story.
***********************
Tuesday March 7, 2000 7pm EDT
DoubleClick: put away the hoses.
**********************************
Pending shareholder approval, PTVL and Travelocity.com will merge sometime this month. They will form the biggest travel portal on the Internet in the world. Nuff said? Yes.
But there is more.
What does HyperPumper like about this deal? Let's take the highlights from a recent company press release.
-- Sabre announced the merger of Travelocity.com and Preview Travel in October of 1999. The transaction is slated to close on or about March 7, subject to the approval of the Preview Travel stockholders.
-- Travelocity.com was the top travel channel according to a January 2000 Media Metrix survey with a 6.5 percent reach. The reach of Travelocity.com, including Preview Travel (not including traffic from AOL Travel channel, Excite or Lycos) was 9.3 percent, making the combined companies the third largest e-commerce site by reach after Amazon.com and e-Bay.
-- Travelocity.co.uk, Travelocity's British version, celebrated its one year anniversary in November of 1999.
-- Travelocity.ca, Travelocity's Canadian version, launched in April of 1999.
-- Best Fare Finder was launched in March of 1999, introducing an industry-first feature that searches for the lowest available fares and displays them in an interactive calendar that highlights the days the fares are offered. Members can then select their preferred travel dates by clicking on the calendar.
-- Alternate Airport feature was added in November 1999 as a companion feature to Best Fare Finder -- allowing customers to automatically search nearby airports for lower airfares and displays options via an interactive window. When selecting from the Alternate Airport feature, airfare savings and driving distance are also provided.
-- Hotel Mapping was added in November 1999. It allows Travelocity.com members to have a quick-and-easy way to compare hotel options. Once the city, date, and amenity requirements have been entered, Travelocity.com will display an interactive map of all the available hotels that meet the designated criteria. Members can view each hotel's location in proximity to areas of interest while also viewing other comparison information such as the price, name of the hotel and the hotel chain.
To top this off, here is the frosting on the cake:
-- Travelocity.com was named "World's Leading Travel Internet Site" for the third consecutive year at the 1999 World Travel Awards.
"When historians look back at the latter half of the 1990s a decade or two hence, I suspect that they will conclude we are now living through a pivotal period in American economic history," Greeenspan said this morning at speech to students at Boston College in ... Boston.
However, despite his optimism about the Internet, in his speech, Greenspan did little to change the Street's perception that the Fed will raise interest rates in two weeks. Greenspan said the Fed will be "vigilant" in addressing "potential financial imbalances" and was upbeat on the so-called new economy.
Kmart (KM:NYSE) let it be known on Monday that its fourth-quarter earnings rose 17%, widely exceeding Wall Street's expectations. Store renovations and new brands appeared to be pushing up margins. On the news, Kmart's Internet partner, Yahoo!, shot up more than 14 points.
At stake is whether Kmart's new online retail initiative, Bluelight.com, will have an impact on earnings going forward, and whether this will have a positive impact on YHOO.
Kmart intends to spin off the unit, which Hall expects would allow the retailer to have a greater Web presence without the nagging costs of Internet development reducing its near-term profits. Kmart will retain 60% ownership of BlueLight.com.
Some analysts have said that the venture could be what Kmart's long term shareholders have been waiting for. HyperPumper believes BlueLight.com may eventually have a higher value than Kmart. Kmart's shares have fallen about 45% over the past year, and are at the point of being undervalued.
BlueLight, started in December, has the backing of Softbank of Japan, Yahoo! (YHOO:Nasdaq - news - boards) and Martha Stewart Living Omnimedia (MSO:NYSE - news - boards), among others.
For its fiscal quarter ended Jan. 26, the Troy, Mich.-based discount retailer posted net income of $412 million, or 77 cents a diluted share, compared with net income of $353 million, or 65 cents a share, in the year-earlier period.
Priceline.com let it be known today that it is moving in to the increasingly hot business-to-business sector.
Speaking to investors at PaineWebber's Internet conference in New York, Richard Braddock, Priceline's chairman and CEO, said the company will offer "name-your-price" services and products to businesses, including telecommunications, freight services, and small-office equipment products. How about staplers?
Priceline, which lets consumers name their price for airline tickets, car rentals, hotel rooms and other services and products, joins a growing list of online and offline companies jumping on the B2B bandwagon.
Priceline up 15 to 90.19 on the news.
Braddock added that Priceline will likely enter into alliances with several major B2B players, but he did not name any potential partners. The company recently announced that users would be able to bid on gasoline starting around Memorial Day.
HyperPumper thinks B2B is a crescendo and things might calm down. But this does not mean B2B stocks will not keep going up. With the large supply chains that companies face, there is a lot of opportunity for Priceline to help them become more cost efficient. The leading research firms have the B2B market pegged between $2.7 trillion and $7.3 trillion by 2004 from about $131 billion in 1999. In comparison, Forrester Research projects business-to-consumer spending will reach $184.5 billion in 2004, up from $20.3 billion last year.
Stay tune.
Disclaimer: HyperPumper's Diary and any opinions discussed herein are presented for entertainment purposes only. HyperPumper may or may not be long securities he discusses here. HyperPumper does not currently have any short positions. HyperPumper does not recommend that anybody act on the opinions expressed herein, which are presented solely for entertainment purposes, without doing independent due diligence.
