Hedge-fund manager Jonathan Cohen of JHC Capital Management thinks tech buyouts will proliferate this year. For one thing, the big-cap techs are rebounding--and scouting for fields to diversify into, to offset a weakening in their core businesses. And the low-cap techs, including the neglected Internet stocks, are getting more attractively valued as they move toward profitability.
LendingTree (TREE ) is one that is takeover bait, says Cohen, for the likes of Yahoo! or eBay. LendingTree brings borrowers and lenders together through its Web site. It gives borrowers access to a network of brokers and banks that best fit their needs. And it provides lending firms with technology to automate their sites for instant services, such as mortgage and equity loans. LendingTree takes no risk in the process. It closed 210,000 loans worth $8 billion in the first nine months of 2001, up 150% from a year ago. Sales jumped 114%, to $45 million. Its stock has been rising since Sept. 21, when it had fallen to 3.98, from 6.52 in July. It is now at 7.87. Cohen sees LendingTree in the black in 2002, earning 33 cents a share. He expects the stock will climb to 15 to 20 in 18 months.
By Gene G. Marcial