Internet has been a hot topic since few years back. Dotcom companies have
been emerged such as mushroom after the rain. Many large listed organisation
also looking forward to invest in dotcom companies. Most tech companies feel
that by offering Internet portal and e-commerce related services would boost
the share price.
In its simplest sense, e-business is the use of Internet technologies to improve
and transform key business processes. In a few short years, e-business has gone
from concept to undeniable reality. For good reason, it works for everyone:
consumers, businesses and governments. The primary values of e-business--cost
savings, revenue growth, and customer satisfaction--are proving to be just the
tip of the iceberg.
Most companies understand this and have begun the evolution from traditional
business practices to e-business. Many are well on their way. They have begun
to Web-enable core processes to strengthen customer service operations,
streamline supply chains and reach existing and new customers.
Many listed companies on the Kuala Lumpur Stock Exchange (KLSE) jumped on the
bandwagon and ventured into Internet related businesses. Recently, Tenaga Nasional
Berhad (TNB), the local electricity provider has just introduced it new e-services,
the "e-click n pay" service to let their customer pay their electricity bill
online 24 hours.
In Hong Kong, the billionaire Li Ka-shing who has business in property, port,
and telecommunication do enter into the Internet ventures when he set up Tom.com
Ltd, which generated much excitement when it made its debut on the Growth
Enterprise Market with a huge premium.
In the United States, Dell Computer Corporation, the world's leading direct
computer systems company and a premier supplier of technology for the Internet
infrastructure has set up an Internet portal and also provide e-services.
Through the direct business model, Dell offers in-person relationships with
consumer, corporate and institutional customers; telephone and Internet
purchasing; customized computer systems; online and phone technical support;
and next-day, on-site product service.
Now, what happen to those companies? Many of them are beginning to realise
that what they were chasing may have been fool's good. Many of these companies
have quietly scaled down their Internet related ventures or just closed them
down outright.
In Malaysia, take AKN Technology Bhd, which was listed on September 2, 1998
for instance. Its flirtation with dotcoms is over. A couple of weeks ago, the
company decided that it should focus on its bread-and-butter semiconductor
manufacturing businesses when it announced the sale of AKN Dotcom Ventures
Sdn Bhd for a paltry RM2.
Time dotcom, a Malaysia Telco which provides fixed-line, cellular, payphone
and internet services, is raising some RM1.8 billion from the (Initial Public
Offering) IPO priced at RM3.30 per share. It offered 572 million shares but
Malaysian Issuing House Sdn. Bhd. said only a quarter of that drew subscription.
The market shunned 75 per cent of the shares it offered.
Tom.com Ltd, the Internet Web site controlled by Hong Kong billionaire Li
Ka-shing, will be the latest dot-com to cut staff, as the sagging market makes
fund raising much more difficult for Internet ventures. Its share price has
since dropped to HK$2.50 from a high of HK$14.30.
For Dell Computer Corporation, it warned for the decline in projected profit
earning last year. Its share price has then become to decrease when the
investors react to the announcement. Dell's share price fell 12% to 89-7/8
on Feb. 12 after two Wall Street analysts said Dell wouldn't be able to
maintain previous growth rates. Its stock price dropped another 8% to 81-9/16
on Feb. 17, the day after its results were announced. On February 15, 2001,
it announced that it would cut down work force by 4 per cent, citing lower
expectations for industry and company growth.
A listed companies' share price is not determined by whether the company has
set up Internet portal or providing e-services. Existing and potential
investors will only concern about whether the company have run the business
successfully. For this, most investor will refer to profitability of the
company in a specific financial year. Investors will very concern whether
a company can maintain the rate of profit growth.
In addition, investors will also want to know how much dividend is being
paid out from them. For this purpose, investors will look into the earning
per share of the company. This is the most frequently quoted measure of
company performance because it tells an investor how much profit each share
has earned during a financial year.
The accessibility and broad reach of the Internet have forever changed
customers' expectations regarding support and response. They expect
accurate, round-the-clock service. Hence the requirement for a massively
scalable, reliable and secure electronic foundation, which includes
reliable and available servers, industry-leading software and middleware,
and worldwide consulting, services from experts with industry-specific knowledge.
Dotcom companies are fading out just as quickly as they mushroomed.
Just look at the constant shuffling of people at the high end of the
companies. CEO's, CFO's, CCO's, etc., come and go more quickly than the
weather changes. Effective leadership in a company comes from the top down;
however, a company that doesn't pay heed to what their workers are saying
is doomed to failure.
This come to the summary that to become a leader in IT, offering Internet
portal and e-commerce related services would definitely not boost the
share price of that company. The most important is that the company has
a good leader to lead the company in order to achieve the company goals
so that the investors will have full confidence towards the company.
Only loyal investors can assure the share price of the company.
|
