| BUSINESSWEEK ONLINE : DECEMBER 27, 1999 ISSUE | ||||||||
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| WHERE TO INVEST -- STRATEGIES FOR STOCKS
The Web's Southern Frontier Net stocks are starting to shine in Latin America Latin America is finally going cyber. Internet subscribers doubled, to almost 8 million, in 1999 and will soon pass 10 million. Many more people log on at work, school, and in cybercafes. But there are few regional Net stocks yet, so the hard part has been finding them. Investors can go for content providers, which are rushing to offer portals, news, e-trading, and e-commerce. Or they can hunt down companies building the Net's high-speed backbone in Latin America. The purest regional Net play is StarMedia. The New York upstart created the first Latin portal. It reached a high of $70 a share last July, two months after its initial public offering at $15 on Nasdaq, and now trades at $37, putting a value on the company of $2.4 billion. Then there's Terra Networks, the Internet spin-off of Spain's Telefonica, with portals and ISPs around Latin America and in Spain. At almost $48, Terra has climbed nearly fourfold since its IPO in November. On Dec. 10, its first day of trading, Argentine portal El Sitio Inc. (LCTO) watched its stock double, to $30, on Nasdaq. All three companies are spending heavily to build their brands. Wall Street also is looking at two of Latin America's media heavyweights, Mexico's Grupo Televisa and Brazil's Organizacoes Globo. Televisa's plans for a portal have helped boost its stock price 164% in dollar terms this year. ''Televisa is a great way to play the Internet,'' says Jose Linares, a media and telecom analyst for J.P. Morgan & Co. in New York. Microsoft Corp. (MSFT) has a deal to develop a portal with privately held Globo and an 11.5% stake in Globo Cabo, its quoted cable division. The stock is already up some 30% since Dec. 1. Leader in the broadband race is Brazilian long-distance telephone company Embratel, controlled by MCI WorldCom (WCOM). It carries 90% of Brazil's Net traffic and aims to be the leading provider to ISPs. Other popular stocks include Telesp Participacoes, the Sao Paulo phone company controlled by Telefonica, which has just launched high-speed digital service to home subscribers. And Mexico's Telmex is a perennial favorite. Already Mexico's No. 1 ISP, it is now developing a Latin portal with Microsoft. More Net-related IPOs are coming. Among those to watch for are Brazilian ISP and portal Universo Online; Patagon.com International, a Buenos Aires online brokerage, and Impsat, an Argentine ISP. Portal yupi.com may be in the pipeline, along with a joint venture between America Online Inc. (AOL) and Venezuela's Cisneros Group. Indeed, the region's cyberfamine is nearly over. Latin America is serving up Net plays as fast as investors can click their mouses. By ELISABETH MALKIN _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS The Web's Southern Frontier TABLE: Latin American Net Plays Best Bet: Portal Time INTERACT E-Mail to Business Week Online | |||
