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about Asia Buzz
Asia Buzz: Dead Cat Walking
NASDAQ's slide is an omen for local tech outfits
By ERIC ELLIS
April 18, 2000
Web posted at 1:30 p.m. Hong Kong time, 1:30 a.m. EDT
A year ago, investment bankers Ilyas Khan and Johnny Chan were zipping around Asia, trying to hire people for their new Internet incubator. The spiel was attractive; if you joined their new outfit, they could soon be "very, very rich." Yesterday, as that new outfit, Techpacific.com, made its premature debut on Hong Kong's Growth Enterprise Market, those that gave up their careers in the Old Economy for the opportunity of the Internet are anything but wealthy.
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 ASIA BUZZ
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Asia Buzz: It's A Bubble!
(I want in!)
- Monday,
April 17, 2000
Culture on Demand: Scams and Worse Online
Is Net fatigue setting in?
- Saturday,
April 15, 2000
Letter from Japan: It's a Jungle Out There
The local/global Internet binary is never wider than in Japan
- Friday,
April 14, 2000
Asia Buzz: Hot Property
An ex-banker turns a blowtorch on Techpacific.com, and turns heads
- Thursday,
April 13, 2000
Subcontinental Drift: Crooked Cricket
And how the Gentleman's Game can be saved
- Thursday,
April 13, 2000
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At the end of yesterday's trade, you couldn't even exchange a ride on a venerable Hong Kong tram for the price of a Techpacific share. You'd need at least two Techpacific shares to get aboard and, at one point, four. It's a far cry from the office atmosphere Khan and Chan hoped would emerge. That's the one we've read about so often--the gentle chiding of option-obsessed staff to get back to work as they click online and watch their net paper worth soar at IPO Ground Zero.
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But yesterday at Techpacific, arguably Hong Kong's most potent exemplar of Internet opportunism, it was the opposite. Employees, friends and families were tallying how much they were losing. Two weeks ago, Techpacific's principals and backers--mostly financial engineers and not techies--determined its shares were worth as much as $HK1.68 (21 cents). That was a price they felt was pitched low enough to allow a sharp turn for Hong Kong's notorious "stag" punters, the momentum traders who sell stock received via a prospectus into a roaring market.
Never mind that Techpacific makes no profits and isn't likely to do so for several years, if at all. At its lowest point yesterday, Techpacific shares were valued like a company that made no profits--just 29 HK cents with virtually zero interest in buying them.
But there were some hefty gains for those fearless enough to step in. By the end of the day, courageous bottom-fishers could've made a handy 70% on the day as the Techpacific stock closed at 45 HK cents (5 cents), just under the 47 HK cents Techpacific sold what they thought would be attractively priced pre-IPO stock to many friends and families just two weeks before the float. But it was still more than half of the HK$1.05 (13 cents) paid by grumpy institutional investors last week during the float.
The Techpacific boys will have been gratified by NASDAQ's roaring return to positive territory overnight but is it a recovery, or a false dawn? Most traders and analysts I spoke to last night feel that the 6% rebound will prove to be a "dead cat bounce," an opportunity to get out of dodgy portfolios before the market continues further south. Looks like difficult times ahead for the Techpacific crowd.
But at the end of the day, Techpacific is trying to run a business, and businessmen are nothing but pragmatic. The IPO float put $US36 million in Techpacific's coffers for web development and marketing. Khan and Chan, both of whom own stock exercisable at levels well under even the 45 HK cents close, say they are in the business for the long-term and still vow to make their employees and supporters very rich.
Noble ideals indeed but it will just take a little longer than they first thought it would.
Ticked off at Asia Buzz? Turned on? Talk back to TIME
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