B2B companies up on strong Q3, regulatory approvals
WEDNESDAY, AUGUST 30, 2000 2:56 PM
- Reuters
By Nicole Volpe
NEW YORK, Aug 30 (Reuters) - Shares of business-to-business software and services companies rose on Wednesday, with early
indications of a strong third quarter for the sector and recent regulatory clearance for various giant electronic marketplaces.
"Both foreign and domestic regulatory bodies have started to give clearance to large mega-exchanges, providing a positive
catalyst for the entire B2B sector," said Dresdner Kleinwort Benson analyst David Garrity.
Earlier in the month, the European Commission cleared Myaircraft.com, an exchange for aerospace parts, and the Federal Trade
Commission cleared the Trade-Ranger energy and petrochemical exchange.
Garrity said in an interview on Wednesday that Federal Trade Commission approval was expected for Covisint, an auto exchange
set up by the Big Three automakers - General Motors Corp. (NYSE:GM), Ford Motor Co., (NYSE:F) and DaimlerChrysler AG (:).
A Federal Trade Commission spokesman declined to comment. There was no other evidence to support the rumoured approval.
"The Covisint approval is only in the rumour stage right now," said ABN AMRO analyst Robert Johnson. "But people know if it
does come, you can expect a substantial upmove by Commerce One."
Commerce One is one of the original partners in the formation of the exchange and would provide much of the technology
involved.
"Commerce One shares have been under a bit of a cloud, while other B2Bs that are less e-marketplace dependent have done
better," he added. "So once this logjam is broken it's likely to move the stock up substantially."
While Garrity called the Covisint decision a bellwether for the sector, officials and the Justice Department and the Federal Trade
Commission have said at seminars for antitrust lawyers that there is no simple rule for B2B deals, any more than there is for other
joint ventures or mergers.
Shares of Commerce One were up $7-1/4 to $59-5/8, making it one of the top net gainers on the Nasdaq.
PurchasePro.com Inc. (NASDAQ NM:PPRO) shares jumped as well, on expectations of a strong third quarter, boosted by a
relationship with America Online Inc. (NYSE:AOL) which was launched on August 16.
"Early returns (from the AOL relationship) thus far have been positive, with over 800 customers already signed up," said Garrity.
PurchasePro shares rose 8-3/4 to 59-1/2.
Other business-to-business companies rose as well. i2 Technologies Inc. (NASDAQ NM:ITWO) shares rose 7-5/8 to 165-1/4, and
FreeMarkets Inc. (NASDAQ NM:FMKT) rose 6-7/16 to 80-9/16.
"I don't think anyone is seeing any slowing whatsoever in this sector," said Johnson. "We've expected summer doldrums and we
haven't even seen those."
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