SOURCE: Bellwether Report

October 03, 2005 15:58 ET

What's the Next Big One After Baidu? Does Vonage Have What It Takes? Others?

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by The Bellwether Report.

TORONTO -- (MARKET WIRE) -- October 3, 2005 -- One of this year's most heavily anticipated IPOs, to date, has been Baidu (NASDAQ: BIDU), a Japenese internet search engine offering auction-based pay for performance advertising.

Much of the excitement for this offering stemmed from the industry-leader Google (NASDAQ: GOOG) IPO last year. There was an incredible amount of press revolving around the Baidu offering, as many investors expected a repeat of Google. Everyone had an opinion, and many were even pessimistic, however, similar to the film industry, in this case it seemed as though any news was good news, stunning to appalling, whatever the view it swirled up curiosity and intrigue.

Come judgment day it didn't matter that the offering increased from 3.6 to 4.04 million shares, that the $27 pricing was well above the original $19-21 range, and that it didn't actually hit the public market until $60. Investors showed up in full force, trading over 22 million shares, producing an intraday, all time high of $151.

Baidu was increasing revenue at a rate of 225% between 2002 and 2004, and pulled out $4.5 million in operating cash flow in 2004, well ahead of the breakeven level reported in 2003. But, as impressive as this was, I don't think anyone expected the stock to hit $151.

At the Bellwether Report, we look for stories like Baidu that are set back from the limelight and ready to burst. It has been an incredible endeavor as we have alerted our subscribers to numerous offerings providing incredible growth before the rest of the market realizes the opportunity.

The IPOs creating the most anticipation lately have been made up of industry leaders offering unique or one of a kind products and services, based on a leading edge or industry first technologies. Technology and internet-related companies are hot again.

An up and comer holding these characteristics, and already generating plenty of anticipation, is the rumored Vonage IPO. Vonage, the leading provider of Voice over internet (VoIP) services in the US, may hold an IPO in the coming months to grow its business to withstand to competition knocking from cable companies.

Vonage has been very succesfull in raising private funding, now accounting for $400 million, $200 million of which was raised in one of the largest single rounds of venture capital financing in the last decade.

One source expects the number of US residential VoIP subscribers to move from 1.1 million in 2004 to 24.3 million by 2008.

In a matter of days, the Bellwether Report is expecting to announce its latest profile to hold an offering. This is a company that holds many of the characteristics investors like about Baidu and Vonage.

Visit the Bellwether Report to be among first to hear about this new technology company, offering a much needed electronic funds transfer service, through the internet, to an untouched industry that moves trillions of dollars weekly. A company with unimaginable potential and what we feel will be truly undervalued at its offering.

Bellwether Report and its affiliates have not been compensated by the above-mentioned companies.

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