C. Everett Koop has been around.
The former US surgeon general with the Abe Lincoln beard was a practicing physician before Pearl Harbor. In addition to holding the highest medical post in the land, he has piled up professorships at prestigious universities, headed up surgical staffs, and edited medical journals. At age 82, he hopes to add a new title to his resumé.
Investors, meet drkoop.com, Net entrepreneur.
On Friday, Koop filed to raise US$50 million for his new Net company, drkoop.com Inc., in an initial public offering (proposed Nasdaq symbol: KOOP). With the proceeds, Koop plans to make drkoop.com the No. 1 health care site on the Web.
Keyword: plans.
Launched in July, drkoop.com has brought in $43,000 against losses of $9 million.
The company plans to launch a much broader array of health care content, as well as community and commerce services built around Koop's good name, but it needs money first. The fledgling firm is just about out of cash, and its auditors have questioned its ability to continue as a going concern.
Drkoop.com is so wet behind the ears it stands out even in an IPO pipeline chockablock with unproven businesses.
"This is extremely speculative," said Steven Tuen, director of research at IPO Value Monitor. There are heaps of opportunities in the online health-care services market, but "going from an idea to a plan is very difficult. The devil's in the details."
That drkoop.com's lead underwriter, Bear Stearns, is willing to push forward with the offering speaks volumes about the state of the market for Net stocks.
"Net companies are coming out earlier and earlier," Tuen said, because investors are increasingly willing to pour their money into "concept" deals.
"When you have this type of enthusiasm in any sector, you have spillover into these sorts of offerings," said Ryan Jacob, portfolio manager for The Internet Fund.
Investor's willingness to fund concepts could come to an abrupt halt if the market stumbles.
Last summer, Healtheon Corp. (HLTH) filed for an IPO during the height of the summer run-up in Net stocks. The health-care software company had big ideas, but hadn't yet developed the products to back them up. It was nonetheless billed as a pending superstar offering.
By the time the scheduled offering date rolled around, however, the markets had dipped, and investor enthusiasm for concept stocks had withered. Healtheon pulled the offering until February, when it could demonstrate some successes.
Will the current market hold up long enough for the toddling drkoop.com?
Koop is a trained pediatrician, but it's anyone's guess whether he can safely nurture his young company through to adulthood.
