SAN FRANCISCO -- Two numbers this morning illustrate the change in investor sentiment these days: 105 and 240.
Those are attendance figures for the first two presentations today in the Rose Ballroom of the Palace Hotel, where Robby Stephens is holding its Tech 2000 investment conference. One of the companies was a consumer-oriented firm. The other one held court about its plans for business-to-business sales.
Which firm do you think drew the 240? Hint: it wasn't the consumer guy.
Niku: Promising future?
Charts for B2B stocks these days might as well be drawn in green for all the money and envy they've attracted. Along with broadband and wireless, B2B currently stands in the vanguard of technology and Internet investing.
So it's no surprise that Commerce One (Nasdaq: CMRC) drew not a standing-room-only crowd, but rather a standing-room-with-people-standing-all-around-the-edges-and-almost-up-to-the-front crowd.
No doubt they all hoped to hear more about Commerce One's role in the new online purchasing venture announced last week by the Big Three automakers. CFO Peter Pervere disclosed no details in the formal presentation, but I suspect he said something encouraging in the breakout sessions that are closed to the press; shortly after the breakouts ended, CMRC shares shot up from 203 1/2 at 11:50 a.m. ET to as high as 207 3/4 in less than an hour.
That's the power of B2B right there. Pervere didn't tell the audience members anything they didn't already suspect -- even the breakouts probably only confirmed positive comments already issued by analysts earlier this week -- but investors felt reassured.
By contrast, the company preceding Commerce One in the Rose room couldn't get investors pumped, not even with a pair of funny commercials, some encouraging financial details, and positive earnings news from a company in its industry.
E*Trade (Nasdaq: EGRP) presented immediately before Commerce One, with CFO Len Purkis telling the audience that assets are growing. E*Trade's revenue is forecast to rise 75 percent this year. Reliance on mere trading is decreasing, with domestic retail transactions making up just 42 percent of revenue, compared to 62 percent prior to the acquisition of Telebanc and other non-broker financial services.
Purkis even mentioned profits (cynics would say that's when all the audience's interest evaporated) and gave a timetable: in the black by the third quarter of 2001. The long term model targets gross margins of 58 to 62 percent, marketing costs of 25 to 28 percent of revenue, and SG&A occupying 8 to 10 percent.
It's hard to complain about that, yet E*Trade shares immediately fell. By the time Purkis wrapped up his breakout (and Commerce One's Pervere ended his slide show), EGRP had given up 5/16. Seems like the clearer you get, the less the market likes you.
Other conference-related notes:
Company executives point to the AT&T contract as evidence that Daleen's software works for major customers, something that had been a concern of some folks in recent months. Daleen could use more high profile customers besides BellSouth and AT&T Canada; the likes of CAIS Internet haven't impressed investors to date. DALN remains far below its level prior to a slump that began in December after a negative 22GO>