Technology Stocks | USWeb (USWB)


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To: Jeff Jordan who wrote (528)8/4/1998 3:52:00 PM
From: Tradewell   of 1188
 
The market is off 260 pts. and USWB is up 1. This tells me that the internet stocks are weathering this storm quite well and are ready to assume some market leadership. Look for a good number out of AOL tonight and a nice move out of the net stocks. We need days like this to remove the nervous nellies from the market. This is a healthy correction in a secular bull market. Don't panic!

Tradewell

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To: Tradewell who wrote (529)8/4/1998 8:16:00 PM
From: Kip518   of 1188
 
Tradewell, another view (from TSC)

Technology bear David Simons, managing director of the institutional research firm Digital Video Investments, said he was worried by the divergence between AOL and many other Internet stocks. In AOL's decline, "What we're seeing is to some extent a preservation instinct by institutions," he said. In contrast, the rise of Excite (XCIT:Nasdaq), up 2 5/8 , or 7.3%, to 38 1/2, and Amazon.com (AMZN:Nasdaq), higher by 1 5/8, or 1.5%, to 109 7/8, indicates "the retail sentiment is far less daunted," Simons said. "That I find a little scary. ... The speculative flame remains."

OTHO, I covered my shorts from 25-27 in USWB today. It has had a good run down and due for a bounce. However, I'd be surprised if it could get any higher than 24 before heavy selling returns. The more the market looks scary, the more those holders of 144 shares want out fast (given their rate of selling before the decline, they were already nervous nellies). For that reason USWB will remain a trading stock for some time.

Good luck


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To: Labrador who wrote ()8/5/1998 6:30:00 PM
From: JC Reddy   of 1188
 
Could someone summarize the merits of buying USWB?

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To: JC Reddy who wrote (531)8/5/1998 8:31:00 PM
From: Rick   of 1188
 
Summary on Merits:

- You will be able to match your loss at the end of the year against gains.

- It will teach you not to bet against insiders, making you a poorer but more experienced investor


That's all I can muster at this point. Take a close look at the selling from July 20 to 30 - apalling.

Cheers. Rick.

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To: Rick who wrote (532)8/5/1998 9:07:00 PM
From: JC Reddy   of 1188
 
Rick:

Besides some insider selling, does anything else concern you? It looks like a well placed companies in the Internet services business. They seem to be more than doubling their revenues every quarter through acquisitions and expansion. That too in a very hot growth sector. Besides I hear Intel has some significant stake in it - I don't think insiders can fool Intel, can they? Also USWB has good ratings by the analysts (1 strong buy and 3 buy).

I also see that USWB is at its lowest price in last three months after its initial surge after IPO. Looks like there is going to be a good run up to $25 or more. Any comments?

- JC

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To: JC Reddy who wrote (533)8/5/1998 11:45:00 PM
From: Rick   of 1188
 
Rambling Response:

1) An investment by Intel is really not important for these reasons:

- Intel's investment is more of a strategic investment placed so that they have some influence in companies that may be able to help them in the future. They use their clout to get in early and cheap - most investors don't have that kind of clout. They have investments in alot of companies. It's the kind of thing that sounds impressive but is really irrelevant.

2) It's more than some insider selling - it is accross the board, and the amounts sold after July 20 are very high. This comes after a secondary offering selling insider shares within months of the IPO. In addition, although not reported, it is likely that acquirees are selling shares.

3) The general share supply - demand dynamic is horrible. Lots of insiders and acquirees selling, combined with receding hype for the internet industry. The company issued lots of shares to buy the various internet companies, and those shares will be hanging over the market for a long time. I doubt that investors will get very excited about earning a few pennies per share - I know I wouldn't be.

4) In general the company's stock price has been held up on hype and excitement about the Net, but not on fact-based performance. My sense is that there are companies that are much stronger than USWeb in marketing to corporate America, including Cambridge Technology Partners (although it's overpriced also).

5) In general, I don't think services is a great way to make alot of money - especially when competition for employees is so fierce, and there is little loyalty - this is very costly. They have to pay their employees alot or give alot of options, which either reduces margins or dilutes existing shareholders.

6) Plain overvalued at over 10 times ttm sales.

Anyway, I haven't looked closely at last quarters numbers, but clearly nobody is overly excited about them, and the insiders are selling briskly - This would not appear to be the greatest of circumstances to buy into.

Rick.

Even at 18, expectations are high.

Also, I could be wrong, but I don't think we've seen the final details on the Gray Peak acquisition, and it would concern me that they paid too many shares.

There really is not much to like, other than the fact that they are in a growth industry. The companies that will do best are the ones that are great at marketing and sales. To date, US Web has done a good job of selling it's stock, but I don't see any evidence that they are all that special at selling services.

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To: Rick who wrote (534)8/6/1998 1:33:00 AM
From: JC Reddy   of 1188
 
(1) I don't know, but the revenue growth is impressive (not the earnings).

(2) They are 144 filings - no sales yet. May be they are expecting a huge run up when they can sell it.

(3) The rest, I don't know what facts you have.


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To: JC Reddy who wrote (535)8/6/1998 9:16:00 AM
From: Trader Harvey   of 1188
 
Any professional-service firm can rapidly grow revenue by low-balling pricing and underestimating project effort. The real key indicator is the margins, in particular the gross margin. And USWB fails the margin tests.
See my previous messages numbers 424, 429, 458, 471, 513, 527 re my concerns about USWB and why revenue growth is not sufficient to assure shareholder value.

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To: Jeff Jordan who wrote (528)8/6/1998 9:20:00 AM
From: Trader Harvey   of 1188
 
Everen Securites does not have first-tier analysts. Generally, even with the better analysts, they regurgitate what management feeds them(I've been there!) In any event, by the time USWB will have to show profitability to meet this analyst's expectations(1Q99), they will have made more acquisitions, incurred more writedowns and obfuscated their real and dismal margin performance(like using their bogus "non-cash" argument--see Q2 earnings report) in ways that let the analysts off the hook.

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To: Trader Harvey who wrote (537)8/6/1998 12:40:00 PM
From: JC Reddy   of 1188
 
NEWS: Thursday August 6, 12:13 pm Eastern Time

Company Press Release

SOURCE: USWeb Cornerstone

USWeb Cornerstone Implements an Internet-based Directory Publishing System at Carroll Publishing

Sophisticated XML and Relational Database System Integrates Content Management and Online Publishing using Texcel's Information Manager

NEW YORK, Aug. 6 /PRNewswire/ -- USWeb Cornerstone (Nasdaq: CNRS - news), a leading Internet professional services firm, and Carroll
Publishing, announced the implementation of Carroll's Online, an Internet based subscription directory publishing system. Carroll Publishing is the leading
publisher of print and CD-ROM directories of employees in Federal, State, Municipal and County Governments. Carroll also publishes information on
Federal and Defense Department organizational charts, programs, and facilities.

Working with Carroll's staff USWeb Cornerstone designed and implemented a complete solution addressing editorial and production workflow,
document/data repository and print, CD-ROM and Internet publishing requirements. ''USWeb rolled up their sleeves to understand our complicated
data and workflow needs,'' said Robert Crossfield, Director of Technology at Carroll Publishing. ''For the first time we have a rational database system
that feeds our subscriber-based online government directories. USWeb's efforts made it possible for us to edit, check in and check out, proof and publish
complex products of all types, including print directories and semi-custom online services. This system enables us to publish up-to-the-hour changes to
the Internet, and it makes publishing custom data for our clients much easier.''

Benefits

Editors automatically validate input, reducing errors and speeding up data verification. Content is easily created, edited and proofed onscreen while
preserving its complex structure. Reduced errors in editorial process deliver synchronized products more rapidly. The system streamlines and automates
CD-ROM, print and Internet publishing and enables Carroll Publishing to create new products with minimal production impact.

Technical Architecture

''Our objectives for the technical architecture were to provide a robust high-performance solution, while leveraging emerging technology standards to
provide maximum publishing flexibility,'' said Paul Ward, USWeb Cornerstone Project Manager. ''These objectives drove us to build the core workflow
engine around an XML data repository. XML is an international standard that captures the relationships in Carroll Publishing's data independent of the
target media.''

Following detailed analysis, products from Texcel (www.texcel.no), Arbortext (www.arbortext.com) and Microsoft (www.microsoft.com) were
selected. Texcel's Information Manager forms the basis of the XML repository. Arbortext's Adept Editor, Adept Publisher for Unix, and Adept
Command Language provide the XML editors and Postscript publishing functions. Microsoft's SQL Server and IIS / Active Server Pages are used to
dynamically generate directory web pages.

Texcel Information Manager

Texcel Information Manager (IM) is a collaborative content management system that maintains documents, document objects, and other content in a
secure database fine-tuned for XML/SGML support. Functions such as access control, check-in/check-out, and versioning are applied to both
documents and document objects, as are linking and the association of metadata with content. In addition to its content management capabilities, IM has
a set of collaborative authoring tools that let groups of people search, view, share, re-use, and comment on information in the repository. Users can also
participate in work processes such as document revision cycles that can be automated using IM's integrated workflow management system.

The ability to relate business logic to information is a key benefit of using Texcel IM. This increases the value of the information, and, since IM is
XML-based, information can be rapidly repurposed for delivery in almost any media, with minimal maintenance. IM's powerful access control and
versioning reduce time to publication by enabling multiple editorial staff to work simultaneously on the same section of a document.

Company Backgrounds

USWeb Cornerstone, a wholly owned subsidiary of Cornerstone Internet Solutions, is an affiliate of USWeb Corporation (Nasdaq:USWB - news;
www.usweb.com), a leading strategic Internet services firm helping clients achieve their revenue, profit, market share, and customer loyalty objectives
through Internet strategies and systems. USWeb partners with clients in three core disciplines: USWeb Strategies helps clients develop breakthrough
Internet business models, through business strategy consulting and needs analysis. USWeb Technologies provides expert application and systems
engineering services to help clients build and deploy solutions that streamline enterprise business processes. USWeb Studio delivers award-winning
graphic and multimedia design, precision user experience planning, and pioneering audience development services.

Founded in 1991, Texcel (www.texcel.no) has offices throughout Europe and the United States, and is represented in Japan by NTT DATA. Texcel's
customers use the Texcel Information Manager collaborative content management system to create intelligent document applications such as interactive
electronic technical manuals, printed and online reference materials, research reports, and product and maintenance documentation. Customers include
Diebold Incorporated [NYSE:DBD - news], Ericsson Telecom, Lockheed Martin, Boeing Helicopter Systems, Thomson Corporation, the U.S. Patent
and Trademark Office, and the U.S. Navy.

USWeb and the USWeb logo are trademarks of USWeb Corporation.

SOURCE: USWeb Cornerstone

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