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graphic Dot-com value
A tech stock pick from Henry Blodget's old nemesis.
April 16, 2002: 5:59 PM EDT
By David Futrelle, CNN/Money Contributing Columnist

NEW YORK (CNN/Money) - Tech investors with long memories may recall Jonathan Cohen, the tech skeptic who faced off against tech cheerleader Henry Blodget way back in 1998.

Blodget had recently put his now-infamous $400 price target on, and Cohen, then Merrill Lynch's Internet analyst, shot back, tagging Amazon as "probably the single most expensive publicly traded company in the history of US equity markets." (Shortly afterward, Blodget replaced Cohen at Merrill.)

graphic graphic
Now Blodget has left Merrill to write a book and Cohen finds himself at the helm of a tech fund -- albeit one a little different than the Internet funds that grew like fungus during the boom.

Value shop Royce Funds has tapped the former analyst -- who recently has been running a hedge fund -- to manage Royce Technology Value. (The fund is brand new, so for information, you should go to the Royce Funds Web site. The ticker is RYTVX (RYTVX: up $0.05 to $5.15, Research, Estimates).) "For the first time in a long time, you can legitimately think about technology equities [as] value stories," Cohen says. Still, he notes, much of the best hunting is done among "names that have been largely ignored by Wall Street."

Ironically, the first name he mentions to me is quite literally a dot-com: Internet domain name registrar (RCOM: down $0.05 to $8.60, Research, Estimates). Compared to better-known (and bigger) rival Verisign (VRSN: up $0.55 to $26.45, Research, Estimates), Cohen says, shares look cheap.

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Recently trading for $8.60 a share (down from $100 a share in 2000) carries no debt and has roughly $5 a share in cash on its books. Cohen thinks the company -- profitable, and a possible takeover candidate -- is easily worth twice its current share price.

Like all small caps, this stock isn't without its risks, and it's attracted more than its share of short sellers. But it's definitely worth at least a look.

Another blast from the past

We hear a lot about digital piracy these days; heck, two recent Tech Investor columns dealt with Napster and Napster-style music, er, sharing. The Internet makes it absurdly easy to pirate music and, now, DVDs.

But you don't need much in the way of technology to be a world-class pirate of ideas and art. For a little historical perspective on the current Napster debates, consider the following passage, which I ran across recently while reading Anita Loos' "A Girl Like I," a fabulous memoir by the author of "Gentlemen Prefer Blondes."

Recalling her early days in the theater in the first decade of the 20th century, Loos noted that:

"A good many of the plays we produced at the Rudwin [in San Diego] were pirated from metropolitan stage successes. In far off New York, a shorthand expert would sit in an obscure seat at a Broadway show and transcribe the dialogue. Then an agency, organized for the purpose of gypping authors out of royalties, would sell the plays to...stock companies...throughout the United States."

How's that for ingenuity?

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