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FreeMarkets, Inc. (FMKT) Message Board

  • shadysideslim shadysideslim Dec 31, 2003 11:30 AM Flag

    FMKT to purchase Covisint assets

    I think this could be a very good move for FMKT. It will be interesting to find out the terms of the deal, how much FMKT is paying and what kind of contracts they are actually purchasing (value and term of the contracts). But, regardless, they will be gaining guaranteed revenue for a few years and more importantly, I think, this may help legitimize them in the auto industry. In the past many auto companies and suppliers have hated online auctions and have not wanted to accept them as a way of doing business. Many of them may have thought (or hoped) that the concept of online auctions would burst along with the tech bubble. This move shows that online auctions have survived as a method of sourcing in the auto industry, and that FMKT is now the dominant online auction service provider in the auto industry. All IMO.

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    • options are underwater? i mean, really now, old harold thought he could run with the young guys. good thing he was retirement age anyhow, cuz retired sounds better than unemployable. i guess kelley can look back and conclude he did the right thing when he swam the other way when morgan stanley suggested creating covisint.

      • 1 Reply to b2blaspheme
      • b2blaspheme, I don't know anything about any options that Harold Kutner (the former head of GM purchasing that helped start Covisint and later became Covisint CEO) may of had. I don't know what kind of options on what kind of stock you are referring to (Covisint is not a public company and has no stock of its own, so there can be no stock options on Covisint). In any case, I'm sure Mr. Kutner has been hansomely rewarded during his career at GM and Covisint.

        I would have ran the other way during the formation of Covisint (that's easy to say now, isn't it!). The main reason is there was a big question mark in my mind as to how suppliers would react to Covisint running auctions. Suppliers generally hate reverse auctions as it is. But in Covisint, you had the major auto customers running the auctions together under the umbrella of a parnership. If you were an auto supplier, would you want to reveal your pricing to a consortium of all your customers? I wouldn't. It was kind of like 'the fox guarding the hen house'. What FreeMarkets is (in theory, and probably in practice) is an indendent middleman handling the auctions and controlling the release of pricing information. In my opinion, that is a big deal if you are a supplier.

    • Quatschkopf!

    • Why is this guy so angry? Another victim of the last few years layoffs who's never been able to get another job? So he takes it out on FMKT. It must be killing him that the stock is flying the past two days. His existence is bound up with the company even though they left him behind a long time ago. He jnows all about the business, yet can't seem to find gainful employment. meantime canny investors are making $$$ on the news while sits on his can complaining and insulting.

      Funny really.

      Hint for you: neither fall in love with nor hate a stock or company. Just make money off it when the time is ripe.

    • This is the nail in the coffin of FMKT.

      1. ES is not performing and from a functional point of view, years behind their competitors.
      2. MSFT .NET platform creates many issues (portability, performance, etc)
      3. Why would someone sell a business like Covisint in such a large vertical?
      Covisint is dead and that is the reason why it is sold. Why was nobody else interested?
      Covisint was sold in a fire sale and FMKT management decided to buy.
      Big mistake!
      What is FMKT's core competency now going forward?
      - Services based sourcing model?
      - Enterprise application with ES?
      - running auctions for the automotive industry?
      This ship is going down!

      • 3 Replies to swguy_for_15years
      • Obviously you are stupid and probably jealous. Let's see you must one of the programmers laid off and looking for a job.
        some facts about covisint:
        1. Currently the largest and a profitable online excahnge.
        2. Has connected more than 130000 suppliers and buyers.
        3. Hosts and manages the supplier portals for Ford, DCX, Visteon, Delphi and some more in pipeline.
        4. Has either has signed contracts or in the process to handle all EDI/XML Production transactions for most OEM and some other major Tier 1 companies.
        5. Has signed long term multi-year agreements with all the Big 3 and various European and Japanese OEM's and Tier 1's for Strategic sourcing services.
        6. Owns intellectual property for all its current product lines.

        FMKT buying covisint auction services is a fantastic move, since it consolidates competition and provides guaranteed revenue for the next 3 years. BTW Automotive OEM's for the last 3years has sourced more than 30 billion goods and services through Covisint Auction services.

        So now tell me moron who is stupid.

      • Obviously haven't done your home work. Covisint is dead, huh? They have 76,000 members and the backing of the big three auto makers. In March the company established a Latin American center. Here is the press release from their homepage:

        Under the terms of the agreement, Covisint will transfer its customer contracts for auction services to FreeMarkets. These contracts will provide committed revenue to FreeMarkets over the next three years.

        As a result of the acquisition, FreeMarkets will serve automakers DaimlerChrysler, General Motors, and Ford under long-term agreements, using its own sourcing technology and services. FreeMarkets may also provide its solutions to OEMs such as Mitsubishi, Nissan, Renault, PSA Peugeot, Fiat, and other Covisint auction services customers. Also as part of the deal, FreeMarkets will hire select Covisint auction services employees.

        "FreeMarkets has built a strong presence in the automotive industry over the years," said FreeMarkets' President and CEO Dave McCormick. "Our acquisition of Covisint auction services will further strengthen and expand this position, and enable us to continue providing companies across the entire automotive supply chain with technology and services to address successfully the sourcing challenges they face."

        To date, FreeMarkets has helped companies in the automotive industry source over $20 billion in goods and services and identify savings of more than $3.5 billion.

        "Covisint has had a very successful year in which we more than doubled our user base," said Bob Paul, CEO, Covisint. "The sale of our auction services to FreeMarkets is a logical and evolutionary step as we continue to focus our strategy on the Automotive Industry Operating System and delivering supplier management portals and data messaging services."

        "We began building our auction service business when the technology was in its infancy and it is now time to turn it over to someone that has sourcing technology and expertise as a core competency," Paul continued. "We believe FreeMarkets is the world's premier supply management company with proven technology and a solid reputation for delivering results."

        Yeah, getting the big thre automakers for a garunteed 3 years is a stupid move!

        Keep trying.


      • Are you another Telco and as ignorant and stupid???