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2007年10月30日 星期二

From Netscape To Google: The Hottest Companies


這篇特別報導回顧過去10年的一些股市新寵之起伏
SPECIAL REPORT: From Netscape To Google: The Hottest Companies Of The Past Decade
Dow Jones

NEW YORK (Dow Jones) -- When MarketWatch launched 10 years ago, the hottest stocks hailed from the budding Internet economy, as Wall Street scurried to capitalize on the legendary initial public offering from Netscape, the granddaddy of all dot-com deals.

Launched in 1995, Netscape's became the first IPO from the Internet sector to double in value during its first day of trading.

Although the company had yet to book any significant profit, it offered investors access to a new mass medium: the Web.

Priced at $28 a share for their debut session on Aug. 8, 1995, shares of Netscape shot as high as $75 and ended that first day at $58.25.

Not long after, the 100% one-day gain became routine in the IPO market, as investors fell in love with a rosy vision of the nascent Internet age -- of a New Economy, even -- while overlooking the risks of betting on firms with little or no net income and only the briefest of track records.

The Net group's so-called story stocks rewrote the record book for the new- issues market. Eighteen of the U.S. IPO market's 20 biggest first-day gainers of all time took place between 1998 and 2000.

VA Linux Systems -- a firm operating in the hot area of Internet infrastructure and a potential competitor to another formerly hot stock, Microsoft (MSFT) -- still wears the crown as the hottest IPO of all time with its mind-numbing 627% jump on Dec. 9, 1999. Priced for the IPO market at $30, shares stood at $239.25 after the first day of trades -- a one-day gain of more than $200 a share for the bankers and others lucky enough to have scored allocations before the stock opened on the Nasdaq.

At the time, investors shrugged off the fact that the company hadn't earned a penny.

Although VA Linux was expected to lose money for years, its valuation of 76 times its yearly revenue seemed "appropriate" relative to its peers, one analyst noted in the happy talk that characterized the era.

VA Linux's first day eclipsed the Nov. 12, 1998, debut by TheGlobe.com, a community site that had held the No. 1 slot with a 606% IPO pop. TheGlobe still ranks a close No. 2 on the all-time list, nearly a decade later.

Even MarketWatch holds a place in the IPO pantheon as the No. 7 opener of all time with a 474% jump over its $17 price in its first day of trading on Jan. 15, 1999.

At the time of the MarketWatch offering, Wall Street put aside jitters tied to stock-market sell-offs in Asia and Russia and dove into MarketWatch as the first major Internet deal of 1999, having no difficulty recalling TheGlobe.com's Day 1 experience.

With their newfound wealth, Internet firms made their mark beyond Wall Street as icons of a short-lived golden age that included lava lights, Gap khakis, logo-emblazoned fleece wear, in-office foosball tables and lucrative employee stock options.

Some of it was pretty whacky. Pets.com never really made much of a splash as a stock because its IPO came too late in the cycle, but its sock-puppet mascot served as a silly symbol of the excessive advertising spending of the newly rich dot-coms.

Netpliance.com, Webex.com and Autotrader touted their wares on the 2000 Super Bowl, the most expensive possible place to advertise.

By 2001, however, Pets.com shriveled as its stock sank 99%. Webvan at one point had a market cap of $4.8 billion, with plans to build 26 grocery-delivery megawarehouses. By the end of 2001, it had gone bust.

CMGI (CMGI) , one of a handful of Internet holding companies to become day- trader darlings, saw its stock fade from triple digits to single.

MarketWatch was no exception. On Dec. 21, 2000, shares of the company closed below $2 a share, less than two years after it traded above $100 a share.

And good old Netscape was bought in March 1999 by another formerly white-hot star of the Net, America Online, for the price of $4.2 billion.

Not long after, AOL bought Time Warner (TWX) in what's since been called the single worst deal in U.S. corporate history.

Survivors of a paradigm shift

From the ruins of the dot-com bust, survivors emerged between 2001 and 2004.

Lawsuits and regulatory actions punished bankers for contributing to the IPO bubble by doling out shares of hot IPOs to their favorite clients, and for publishing sunny research reports to help boost their firms' investment-banking coffers.

Retail investors stayed away, in relative terms, from the stock market. The remaining investors no longer wanted story stocks -- they wanted solid names with established records.

The IPO market responded with defensive deals from bulletproof companies that had survived the meltdowns following not only the dot-com bubble bust of 2000 but also the Sept. 11, 2001, terror attacks.

Unproven Internet companies gave way to reinsurance providers and other financial firms such as CIT Group (CIT) and Genworth (GNW) .

IPOs could make it out the door if the companies had shown net income and a willingness to cut offer terms in the face of a bear market.

Excitement started building again behind financial-marketplace stocks such as the Chicago Mercantile Exchange (CME) in late 2002 as well as select tech names such as Transmeta (TMTAD) .

By 2004, the stock market was well into a recovery when Google (GOOG) filed to go public.

Fashioning itself more a Berkshire Hathaway (BRKA) than a Yahoo (YHOO) , the Mountain View, Calif., company stepped into the IPO market -- albeit amid questions about its pre-IPO behavior and its unorthodox offering -- on solid footing, with a history of measurable net income and prospects of speedy advertising growth.

Although its Dutch-auction-style IPO drew resistance from bankers, Google managed to rise 18% in its first day of trades after pricing at $85 a share on Aug. 18, 2004.

The Google train kept picking up speed as the stock passed the $200-a-share mark within months and made multibillionaires out of co-founders Sergey Brin and Larry Page -- and along with them CEO Eric Schmidt, a Sun Microsystems and Novell veteran -- and joined the S&P 500 (SPX) .

Google remains one of the hottest stocks on the market, with a capitalization approaching $200 billion, a stock price of more than $600 a share, and plenty of irons in the fire through its ownership of YouTube and much speculation centering on wireless plans, plus a rich war chest for future acquisitions, so say nothing of further growth forecast in online advertising.

The Wall Street gauge of those prospects? For one, a fresh $800 share-price target following Google's latest earnings report.

Nearly as hot as Google of late is Apple (AAPL) , which began marching back into investors' good graces when Steve Jobs rejoined the company in the late 1990s. The stock has heated up even more in the past couple of years as the company revolutionized the music business with the iTunes online store and the iPod line, whose success ultimately gave rise to the iPhone -- and a $160 billion market valuation.

Although the energy sector is now navigating a market correction, leading lights of the oil, gas and electric businesses have been ablaze as oil prices have set new records.

With a market cap now handily exceeding $500 billion, oil giant Exxon Mobil ( XOM) has defied the law of large numbers by rising quickly despite its scale -- to $94 a share from $68 in the past year, while also paying out fat dividends and buying back billions in stock.

Stars of the alternative-energy game have also shined particularly brightly on Wall Street lately, with SunPower (SPWR) and First Solar (FSLR) posting big gains.

And, in the IPO market, tech- and Internet-flavored firms are once again playing a starring role, although it should be noted that the most popular offerings have more revenue and net income to show than did their counterparts in the bubble years.

IPO standouts of late have included VMWare (VMW) , Athenahealth (ATHN) and Compellent Technologies Inc. (CML) .

And, today, as a 10-year-old MarketWatch looks toward the coming 10 years, it seems safe to forecast that hot stocks will come and go, and booms will turn to busts (and, ideally, vice-versa). But the marks set by the market debutantes of the 1997-2000 era will likely stand for at another decade, if not for the next century.

  (END) Dow Jones Newswires
10-30-07 0103ET
Copyright (c) 2007 Dow Jones & Company, Inc.

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