reality check

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

DEFLATION HITS NET IPOs
The market has spoken: unless e-commerce companies begin showing
profits,
the money tap is going to dry up, and all that's left of dot-com
euphoria
will be a major hangover. According to research by Investor's Business
Daily, 165 high-tech companies that went public since the beginning of
1999
are now trading below their initial offering prices, despite a 90% gain
in
the Nasdaq over that time period. Hardest hit are the
business-to-consumer
operations that hawk everything from PCs to pet food over the Net. "A
lot of
companies out there might just be the walking dead," says a senior
portfolio
manager at Munder Capital Management. "Access to capital is going to be
a
big issue." And where has the capital gone? A lot of it is sitting in
the
coffers of advertising companies, who've profited nicely from the
dot-coms'
desperation to build their brands. (Investor's Business Daily 6 Apr
2000)

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Michael Perelman
Economics Department
California State University
michael@xxxxxxxxxxxxxxxxx
Chico, CA 95929
530-898-5321
fax 530-898-5901