Internet Update
Dateline: 06/28/99
With today's column I'm moving my Internet Update to Mondays. This is because I update my Canadian Internet Stock Average on the weekends and doing a column Mondays gives me the opportunity to comment on the previous week's market action with respect to these stocks.
The big news last week was the launch of the long awaited TD Waterhouse IPO. With a strong market demand for the stock, the IPO price was set at $24 U.S. on the New York Stock Exchange or $35.28 on the TSE. The issue raised over $1 billion and was the largest Internet related IPO in the world and the 14th largest IPO of any industry launched on the NYSE. It closed after its first day up $1.63 at $25 5/8.
The Toronto launch got off to a rockier start. Additional regulatory hoops delayed trading until 1:20 PM EDT. But once trading began, the stock moved up to close at $37.80. By week's end, however, the stock settled below the IPO price to close at $35.05. Like Versus Technologies (R-Trade Canada) before it, investors now have an opportunity to buy the stock at below IPO price.
Versus, you'll recall, languished below IPO price for quite some time before suddenly doubling and then settling back to its current level of $14.80 - up 28.7% from launch. Is TD Waterhouse worth buying? Perhaps for aggressive investors. But ace stock picker Pat McKeough (The Successful Investor) recommends shares in parent TD Bank instead for conservative investors.
TD Waterhouse wasn't the only news last week. We saw a surge in price for a couple of stocks. USA Video, which I have now added to my index, jumped from $0.99 on June 18 to close at $1.77 on Friday, almost double. This on news of its first sale. USA Video uses a compression technology developed for the U.S. Navy called Wavelet which allows for streaming video at faster speeds and with better resolution than previously possible. In the company's words, it "gives users full-screen, full-motion, broadcast-quality video; the unique flexibility of standard, VCR-like controls of play, fast-forward, reverse and pause; and the convenience of a standard internet-browser format for access".
Broadband services will become increasingly valuable properties as convergence between television and the Internet continues. This is a stock to keep an eye on. The company is international in scope with offices in Mystic, Connecticut and Vancouver, B.C.. It trades on the Alberta Stock Exchange as US and on the OTC BB as USVO.
The other large jump in share price was for Starnet Communications, profiled here Friday. It jumped from $12.75 on June 18th to close at $17.13 Friday, a 34.4% increase. There were no major announcements so I know of no particular reason why the stock moved up so much.
On the negative side, Jetform Corporation dropped from $6.70 on June 18 to $6.00 by Friday after reporting a $5.8 million loss in its fourth quarter. The stock is down 69.6% for the year to date. The firm is restructuring and taking new Internet based business initiatives and expects to return to profitability in 2000.
Jetform makes electronic forms and "Web-based software solutions that automate business processes and transform them into e-processes". The Ottawa based company has been around since 1982, employs over 650 people and is global in scope with offices in the United States, the United Kingdom, France, Germany, Sweden, China, Singapore, Australia, and Ireland. Its clients include such giants as Chrysler and the Chase Manhattan Bank.
The company attributes the current problems to a slump in corporate spending on software due to Y2K remediation efforts. With the stock so low, some analysts are now rating Jetform a buy.
Certainly the company has seen better days. Last September it became the first "Company of the Year" winner in the Branham/Canaccord SoftWorld'98 Awards as Canada's top company in the software and IT services industry. It had just come off a stellar year that saw a 45% growth in revenues. The company ranks 629th in the Financial Post's list of the top 800 companies by revenue, up from # 690.
Reader P.M. sent along an email after my Friday article on Internet gambling companies suggesting I add a company called icrystal. He wasn't sure if it was a Canadian company but thought it might be. The company is based in Vancouver but lists its offices as being in Point Roberts, Washington.
Vancouverites, of course, know that Point Roberts is one of those anomalies that is in the U.S. by an accident of geography, namely it is an appendage of Canada that sticks out below the 49th parallel. It is not connected directly to the U.S. and can only be accessed by going through Canada or by boat. To all intents and purposes, it is a bedroom community of Vancouver.
The company acquired Metrobingo of Surrey, B.C. and is looking to license up to 20 websites to use their technology. Icrystal's first casino client, Video Poker Palace, went online earlier this month and is now generating revenues.
The company trades on the OTC BB as Softnet Industries with the symbol SFNT. I've added it to my Yankee Index of Canadian Internet companies trading exclusively on U.S. exchanges. Be sure to check out the Canadian Internet Stock Average for other changes as well.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
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Top 40 Casinos - The definitive site for rating online gambling sites.
Internet Sourcebook - This interesting and useful site lets you narrow down searches on Internet companies with various parameters including country.
High Tech Links - my collection of High Tech Links at Investing: Canada.
Canadian Internet Stock Average - my charts of Canadian Internet stocks and how they have fared since January First.
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Our weekly Internet Update looks at companies engaged in the
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Here's a handy guide to our newest feature
at Investing: Canada.
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06/16/99 - Best of
the Net: globeinvestor.com
Find out about one of the hottest new stock investment websites
in Canada and my pick for Website of the Month for June.
Canadian Mutual Fund Database - A database of mutual funds with links to a variety of sites offering relevant information on each. This index is a work in progress and will be revised and changed continuously. Recently updated to include 30 companies.
Canadian Internet Stock Average - Prices updated as of Friday. Three new stocks added to index. Two new stocks added to the Yankee Index. New Gaming Sub-Index added to the Sub-Indexes page. New stock added to the ISP Sub-Index.
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