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Anyone wondering about
the stock Inktomi, here's an article out of the Standard
Link to full page: <A
href="http://www.thestandard.com/article/display/0,1151,23331,00.html";>http://www.thestandard.com/article/display/0,1151,23331,00.html
<FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>April 4, 2001, 6:13 AM
PDT <FONT color=#003399 face="Arial, Helvetica, sans-serif"
size=3>Inktomi Taints Net Infrastructure Sector <FONT
color=#003399 face="Verdana, Arial, Helvetica, sans-serif" size=1>The company's
earnings warning is bad news for everyone. But one company could escape the
carnage: Akamai.
<FONT color=#000000
face="Verdana, Arial, Helvetica, sans-serif" size=1>By Elinor
Abreu
<FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>
<A
href="http://www.thestandard.com/companies/display/0,2063,54487,00.html";>Inktomi
(<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=INKT";>INKT)
's announcement of lowered earnings estimates and layoffs may drag down stock
prices for other Internet infrastructure companies, but analysts say a
subscription business model could be the saving grace for the other leading
company in the sector: Akamai.
Inktomi announced Monday that it expects to report second-quarter revenue of
$36 million to $38 million, and a loss of 23 cents to 25 cents per share
excluding one-time charges. That compares to analyst estimates of $65 million in
revenue and a 4-cent loss. Actual results will be reported April 19.
Foster City, Calif.-based Inktomi also announced plans to reduce its
workforce by 25 percent, or about 250 jobs. The company will incur a
restructuring charge related to those layoffs in the June quarter.
Inktomi President and CEO <A
href="http://www.thestandard.com/people/display/0,1157,1250,00.html";>David
Peterschmidt attributed the company's financial woes to the declining
economy in the U.S. and Europe, and to the subsequently reduced demand for its
caching software as companies reduce spending on large capital projects.
The news hit content delivery companies across the board. Inktomi's stock
went from slightly more than $6 before the announcement of its earnings
shortfall to $4 on Tuesday morning, and then $2.79 later in the day. Akamai's
stock dropped from $8 on Monday to $5.81 on Tuesday; <A
href="http://www.thestandard.com/companies/display/0,2063,52600,00.html";>Digex
(<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=DIGX";>DIGX)
dropped from nearly $14 before Inktomi's announcement to close at $10.13
Tuesday; <A
href="http://www.thestandard.com/companies/display/0,2063,59688,00.html";>Digital
Island (<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=ISLD";>ISLD)
went from $1.84 to $1.50; Cacheflow dropped from $4.50 to $3.50; <A
href="http://www.thestandard.com/companies/display/0,2063,47100,00.html";>Network
Appliance (<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=NTAP";>NTAP)
went from more than $16 to $12.50; and <A
href="http://www.thestandard.com/companies/display/0,2063,13494,00.html";>Cisco
(<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=CSCO";>CSCO)
dropped from just over $16 to $13.75.
Calling Inktomi a "leading indicator of demand for content management
infrastructure and services at the edge of the network," Lehman Brothers said in
a report issued Tuesday that Inktomi's "miss" does not bode well for Akamai in
particular. Still, Lehman regards Akamai highly and said that in a worst-case
scenario another Internet infrastructure company would acquire Akamai.
But other analysts see less risk for Akamai because of its business model.
While Inktomi sells software to carriers and other telcos and service providers,
including <A
href="http://www.thestandard.com/companies/landing/0,4850,266229,00.html";>America
Online, Excite@xxxx and <A
href="http://www.thestandard.com/companies/display/0,2063,10200,00.html";>BellSouth
(<A
href="http://www.smartmoney.com/thestandard/eqsnaps/snapshot.cfm?symbol=BLS";>BLS)
, Akamai sells services to content providers such as CNN, CNBC and Reuters.
These analysts said Inktomi's carrier and other service provider customers
may be holding off on upgrading their networks and buying more software, but
that the content providers that pay subscription fees to Akamai will be much
less likely to shut down their services in the wake of the current economic
downturn.
"Companies that sell boxes and shrink-wrapped software have bigger risk in
today's environment," but Akamai continues to see strong demand from resellers,
said Mark Langner, an analyst at San Francisco's Epoch Partners. "Once you have
a content delivery service you can't just unhook the service."
Analysts are forecasting a 42-cent-per-share loss for Akamai for the first
quarter. In the fourth quarter, it beat expectations by about 7 cents per share,
reporting a 61-cent loss.
----- Original Message -----
<BLOCKQUOTE
style="BORDER-LEFT: #008000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Ira Tunik
To: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, April 03, 2001 07:34
PM
Subject: Re: [RT] New ploy
You are not missing a split. chart attached. I don't
know what they do, I don'tfollow the stock. Maybe someone else can
answer that question. I do know thatthey are losing money.
Ira.Don Ewers wrote:> Ira,> You mention Inktomi in
your post and coincidentally they were talking about> it on CNBC after
hours that it had gone from $151 to $2.79 (my data base> says more like
$241 but maybe missing a split).>> Another dumb question, I
won't ask you to explain the $151 or the $241> whatever, I
understand that mania but $2.79?? Is this a great opportunity> or the
end of the company?? These numbers are absolutely hard to comprehend.>
I have no idea who or what they do, but the name has appeared enough
one> would assume they are a going concern?> Are we witnessing
an opportunity or just the opposite? Amazing.> don
ewers>> ----- Original Message -----> From: "Ira Tunik"
<irat@xxxxxxxxx>> To: "realtraders"
<realtraders@xxxxxxxxxxxxxxx>> Sent: Tuesday, April 03, 2001 4:18
PM> Subject: [RT] New ploy>> >To
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