Investment Bank Projects B2B Burn Rates
By Cindy Christ
Dresdner Kleinwort Benson, the private equity arm of Germany's
Dresnder Bank, released a list Wednesday of business-to
-business electronic commerce providers with the highest cash
burn rates.
According to CNBC financial television, here are the top five,
with the estimated number of quarters left before the
companies run out of cash:
US Internetworking 10.78 quarters
FreeMarkets 12.84 quarters
Ventro 14.69 quarters
PurchasePro.com 23.15 quarters
Clarus 23.54 quarters
The report comes on the heels of a widely criticized study
from Barron's suggesting that cash burn rates at any number of
business-to-consumer e-commerce providers and other online
firms would leave them out of cash by yearend.
Although many questioned Barron's research methods,
independent auditors for three companies on the list, Peapod
(PPOD), CDNow (CDNW) and Dr.Koop.com (KOOP), recently
questioned their ability to stay in business.
Within moments of the report's broadcast, callers taking issue
with Dresdner's research methodology lit up the phones at
CNBC. In particular, some said it would be "impossible" for
Clarus to run out of cash in the time mentioned and that the
report failed to take into account a secondary offering of
Clarus shares.
At the close, shares in US Internetworking (USIX) were up
$0.52, or 2.1 percent, to $25.44. FreeMarkets (FMKT) dropped
$4.19, or 5.8 percent, to $67.81. Ventro (VNTR) lost $1.44, or
4.8 percent, to $28.62.
PurchasePro.com (PPRO) fell $5, or 13.8 percent, to $31.31.
Clarus (CLRS) gave up $1.62, or 4.2 percent, to $36.88.
As part of the report, Dresdner also reiterated its "buy"
rating on shares of leading B2B players Commerce One and
Ariba, saying they're best positioned to survive the B2B land
grab.
Commerce One (CMRC) jumped $13.06, or 15.9 percent, to $95.44
ahead of its first-quarter earnings announcement set for after
the close.
Ariba (ARBA) gained $3.25, or 5 percent, to $68.
