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about Asia Buzz
Asia Buzz: Burger Joint
Strap yourself in NASDAQ-bound Netrepreneurs. It's going to be a wild ride
By ERIC ELLIS
March 30, 2000
Web posted at 12:00 p.m. Hong Kong time, 11:00 a.m. EST
Ask just about anyone these heady days and they'll tell you the stock market's topping out and the tech bubble is bursting. But the queue is getting longer: Asia's queue to join America's NASDAQ exchange that is. It seems that everyone's got pre-IPO condition, a curious phenomenon which involves furtive but frantic tapping away at a calculator, and having an encyclopedic knowledge of NASDAQ, and Alan Greenspan's, movements.
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 ASIA BUZZ
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Longish-standing (for Asia) Internet outfits such as Sina.com, Korea Online, Netease.com, Techpacific.com, Globalsources.com, Amoweb.com and Asiacontent.com are now knocking on NASDAQ's door, while lesser lights such as Singtel's Lycos Asia and Mediaring.com reckon they have a shot as well.
At the same time, Internet and technology investment funds have sprouted across the region, backed by names such as Dresdner Bank and DBS Bank. Big Silicon Valley investment names such as Draper Fisher Jurvetson, Walden, Sequoia and Flatiron Partners are scaling up their regional presence. Australia's richest man, Kerry Packer, has set up a $300 million fund targeting Indian I.T. Even Jardine Fleming, that venerable depository of expatriate Oxbridge graduates, might even be getting a dotcom makeover.
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INTERACTIVE
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What's going on here? Is everyone losing their mind, and then their money? What's happening is the big money from the West is finding its way into the world's last undeveloped frontier where there is money and industry, Asia.
But the wave of financing currently breaking across the region might also be a sign that things are maturing in the U.S. When Asia, an emerging market to a Wall Street trader, slumped into crisis in 1997, U.S. investors tapped into their own emerging market within, Silicon Valley. The Valley's been innovating for years (Hewlett-Packard and Apple have 14-year-old Web addresses) but financiers now milked it as an investment destination. Risk capital suddenly seemed a virtual no-brainer. Now that's happening here.
Net CEOs will tell you they don't care about the money, that the business is what's important; the staff are focused and don't care because they are in for the long haul. It's a mantra you'll hear in any Asian capital at the moment, because it sounds good at a road show when courting older men in golf shirts with lots of money to throw around. It's about as legitimate as a $3 note, or the lightly capitalized British Virgin Islands holding companies many Asian Net companies favor.
Asia has always been good at imaginative financial engineering. It's learning fast about companies that industry skeptics like to call burgers. They are dotcom outfits that are created in order to be flipped--either sold or sold out of, sometimes before the company has even racked up its first sale.
And for companies that want to list at home, official Asia is creating a framework to assist that process. You can now list your profitless company on Hong Kong's GEM (second board) exchange and be shy of options escrow in six months. That would suggest an almighty rush for the door on the first clear day. It will be interesting to see what happens with Tom.com when that day rolls around in a few months--after the Li family secured a waiver from regulators. The regulations are a little more stringent for the NASDAQ and a techpreneur has to offer a series of legal guarantees they have longevity, at least for the medium haul.
At the end of the day, for Netrepreneurs it's a trade-off between a lesser valuation for a local listing (though not so for Richard Li's Pacific Century) or the chance of a higher multiple on the NASDAQ, whose denizens purportedly understand the sector better. A good recent example of that has been the Hong Kong mobile phone operator Sunday, which soared on its U.S. opening but tanked on its Hong Kong debut.
The list of names above are just the beginning of a beauty parade that I expect will be as many as 200-strong by the end of the year. Expect just 20 of them to succeed. Strap yourself in. It's going to be a wild ride.
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