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2HRS2GO: Investors need better reasons to bid up

    Those still thinking of buying into International Inc. (Nasdaq: BIDS) might want to heed the following message:

    "*** Please return to this page within two weeks for a major update. We're sorry for the inconvenience. ***"

    Have an opinion on this?

    That's the Investor Info section of's website redesign, an event that jolted traders into action: shares of were up more than 28 percent today on the news, on volume approaching 5 million shares. Perhaps its the Liz Taylor theory of the market: get a facelift, a new partner -- Rogers Video, in the case of -- and voila! You get a boost.

    Today's news has all the depth of celebrity news and none of the entertainment value. I've always been wondered why online companies love to trumpet revamped websites. Does it change the business model? And why couldn't the company's designers get it right the first time?

    (Disclosure time: ZDII seems to have been showered with massive indifference following the overhaul of this website. "It's supposed to be easier to read without blurbs for every story," said the Boss. "Your fonts are too small!" replied readers. Ok, maybe our redesign didn't work quite as planned, but just because the pot is black doesn't mean the kettle isn't.)

    In the case of, black could have been painted over certain pages for all the information they contain for would-be investors. You already about the aforementioned Investor Info section. Now go to Press Releases and try finding one; in the meantime, enjoy the blank screens that greet you as you click on each PR headline. "The are no press releases this for this Month," reads the section entitled "Current Month". That's funny, I could have sworn put out something this morning. Or did traders just dream up the PR Newswire headline today?

    Obviously not, since does have a new look. But today's upward stock climb may as well be a dream for all its staying power. The stock certainly doesn't have much solid footing in's financials, which happen to be uglier than most Internet fledglings -- and that's saying a lot.

    Second quarter revenue of $4.3 million (in U.S. dollars, using the June 30 exchange rate) represented a year-over-year increase of 12 percent -- anemic growth for an established PC manufacturer, let alone a young Web company like The company did cut losses 24 percent, to $2.5 million from $3.3 million; but you still have a long way to go when your red ink equals almost 60 percent of your revenue.

    Company executives predict break even cash flow by the fourth quarter, with $50 million revenue total this year. Cash flow is an important measure -- at least if it's not negative, the company won't go out of business -- but given the paucity of analyst coverage, investors have no idea when to expect actual profits. also faces more immediate issues, namely every other auction site out there, including the ever-more ubiquitous eBay,, uBid and Onsale. And being primarily an auctioneer of PC- and electronics-related hardware, has to feel the threat of plummeting retail prices for those items.

    In other words,'s situation today is hardly different than it was in April when the company's IPO hit the market with a debut best described as tepid. It's too late in the day to bother playing trader with this stock, so if you're really interested in, at least take the investor website's advice: return in two weeks, when the hype is gone.

    Other issues:

  • TV Guide Inc.
  • (Nasdaq: TVGIA) The purveyor of the most widely printed magazine in the world gets to put up content for America Online. Reaching more than 18 million subscribers is a great thing, to be sure, but given that these AOL deals rarely pay much, if anything, to the content provider, it has to be considered more of branding deal for TV Guide.

    And you have to wonder how much benefit TV Guide gets on that front. It's already one of the most recognized print brands in the world, perhaps the most recognized, which makes you wonder why some stock buyers are so gaga over news that ought be considered mildly positive. The daytraders who jumpstarted the whole thing are having fun, that's for sure, but I wouldn't want to be the ones stuck at the top when the momentary wave recedes.

  • Gateway Inc.
  • (NYSE: GTW) ABN Amro analyst Jonathan Ross downgraded the PC maker to "hold" from an "outperform" rating. "The market may be getting ahead of itself as expectations run high," Ross writes in a research note released today.

    It's a risky thing to make that kind of valuation call just as the summer ends and the PC market heats up again, especially if you believe the company's operations will continue to do well. "We look forward to the possibility of a blow-out third quarter," says Ross, who raised his 1999 earnings estimate to $1.42 a share from $1.37, and boosted his 2000 forecast to $1.76 per share from $1.74.

    Nonetheless, ABN Amro's new price target is $46 a share, or a little more than $4 lower than where the stock was trading this morning. "We eagerly look for buying opportunities below our target," Ross said, who notes that prices could keep falling in the PC market, especially if a $199 PC hits the consumer market by year's end.

    Market indices moved in negative waters in the afternoon. The Nasdaq Composite Index was down 23.27 to 2813.99, the S&P 500 lower by 8.96 to 1341.49, and the Dow Jones Industrial Average down 24.38 to 11009.75. 22GO>