Cornerstone: About To Turn A Corner?by
Has microcap sizzler Cornerstone Internet Solutions (CNRS), whose shares have fizzled since December from 12 to 6, lost its spark? Not a bit, say some pros who have added it to their stakes since the stock's recent fall. Most of these investors scooped Cornerstone shares when they were trading much lower. Cornerstone, which helps clients develop Internet strategies, was highlighted in this column in mid-August when it was trading at just 2.
Two things will ignite the stock once more, says one big stakeholder: Cornerstone will soon have a national rollout of its FOODgalaxy.com service, which lets restaurants and other food-service establishments post lists online of their supply requirements. Food suppliers that subscribe to FOODgalaxy.com respond to the list by submitting their bids based on price and product quality. This competitive auction-like process tends to drive down the cost of goods to buyers by as much as 20%, the company says, and it saves both buyers and suppliers a lot of time. Already some 550 food establishments and suppliers are using FOODgalaxy.com's system. Down the road, Cornerstone is expected to take FOODgalaxy.com public, says one investor.
One other thing: Cornerstone is forming a strategic alliance with a giant financial-services company to provide credit facilities to subscribers of FOODgalaxy.com. The tie-up will enable Cornerstone to broaden its services to its clients, while the financial-service company will get new business and gain new customers. Cornerstone declined comment.