Supply Chain Stocks: Not Close Enough

Supply chain stocks get good marks for high hopes but fall drastically short when it comes to performance.


[From iSource Business, February 2001] Although in the early months of iSource Business the content was focused to cover the procurement segment, this stock list has always included the more encompassing realm of the supply chain universe. This list has also always included both brick-and-mortar type companies and pure dot.coms, a reflection of the reality we saw more than eight months ago.

Today, the digital supply chain is intermixed with brick-and-mortar reality, and that's a fact of life. Pure dot-com models have been shattered and their company stocks battered, especially in the last two months of 2000. Several of them are rethinking their market positioning and rejigging their business models one more time to more closely infiltrate the brick-and-mortar realities. Although most of those struggling companies are private, the unlucky public companies face an uncertain future. They include Ventro, VerticalNet, Sciquest, Neoforma, Medinex and Marex.

Whereas transaction liquidity is quintessential to a pure procurement-based exchange, it's value-added services that are necessary to a supply-chain driven marketplace. In the supply-chain driven market, the value needed is the value offered to existing buyers and sellers of a particular industry segment. The value is certainly not in just bringing them together over an electronic channel. Industry-sponsored marketplaces will pave the way to prove this new evolutionary model for yet another chapter of the B2B commerce. We will be waiting with baited expectations.

And to show how minuscule the real impact of pure electronic marketplaces has been, Jupiter Research recently unveiled the top 25 Net markets, boasting combined quarterly revenues of $238 million. Compared to our list of 39 hybrid companies, that's only .7 percent of $35 billion in quarterly revenues!

We are so close in excitement, yet so far in financial performance.

Winners:

  • GWW 37.25 14%

  • ORCL 30.0625 -1%

  • IBM 97 -3%

  • PSFT 44.1875 -6%

  • PRGN 20.75 -14%

Losers:

  • VERT 8.96875 -232%

  • ITWO 64.8125 -163%

  • VNTR1 .75 -146%

  • INTW0 .875 -143%

  • SNET0 .875 -143%
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