Frank Quattrone is off the hook -- for now. A judge today declared a mistrial after jurors couldn't decide whether the former Credit Suisse First Boston tech-IPO king had obstructed justice during investigations into a blue streak of red-hot initial public offerings. Rumor had it Quattrone forwarded an email encouraging colleagues to go Andersen on some highly relevant documents.

Before that, there were rumors of some hanky-panky involved in the way shares of hot IPOs were allocated. With or without the hanky and/or panky, investing in IPOs is a tricky business. As you'll read below, there's some hope that this might not one day be the case. Here's hoping.

In today's Motley Fool Take:

Time to Buy JDS Uniphase?

Just when you thought it couldn't get any worse, it does. But it's not over yet.

JDS Uniphase (Nasdaq: JDSU) reported first-quarter sales down 8% sequentially and 24% year over year to $147 million. Not only was that at the low end of estimates, the company forecast a second-quarter sales decline to between $140 million and $150 million. This from a company that in early 2001 approached $1 billion in quarterly sales.

But here's the key: Revenues at the core communications products group seem to have stabilized.

Following an astonishing decline, sales of communications products over the past four quarters have come in at $75 million, $74 million, $76 million, and $74 million, respectively. It's the company's lower-margin thin film business that has taken the hit of late, falling from $94 million in the March quarter to $73 million this quarter.

The gist is that the company is really in pretty decent shape.

Not only doesn't the communications business appear to be getting any worse, a global realignment program has cut headcount from 29,000 in March 2001 to a mere 5,200 today, helping minimize cash burn. Cash flow breakeven is down from $250 million in July 2002 to $200 million in the current quarter.

In the meantime, JDS sits on $1.16 billion in cash. Clearly, the company is in a position to wait out the communications nuclear winter.

If there's a time to buy its shares, this might be it.

Back in July, Tom Jacobs felt it was too early to buy. On one hand, it might be safer to wait for the turnaround. On the other hand, investors waiting for Amazon(Nasdaq: AMZN) and Yahoo!(Nasdaq: YHOO) to turn around missed buying opportunities in the single digits.

It's going to happen. The question is when, with one very important caveat: Investors waiting for the answer could get stuck holding dead weight for a very, very long time.

Quote of Note

"Talk doesn't cook rice." -- Chinese proverb

Googling an IPO Revolution

Google is more than a technology; it's a way of life for millions. That's not to say that investors will shy away from making a buck on the phenomenon.

Last night's buzz was that Google will not only go public early next year but will do so through an online auction. For a revolutionary company, this seems fitting. After all, part of the ethos of Google is openness, which is antithetical to the traditional way IPOs are distributed.

At the extreme, an online auction for the IPO of a red-hot company -- which could be valued at more than $10 billion and raise more than $1 billion -- could be a watershed event in finance.

True, pioneer W.R. Hambrecht & Co., a San Francisco investment bank, auctioned RedEnvelope(Nasdaq: REDE), Peet's Coffee & Tea(Nasdaq: PEET), and OSTK), but IPO auctions have thus far been modest.

Which is all the more curious given how simple an online IPO actually is. If you bid the right price, you get the shares. There are no secret handshakes, no allocations, no sweetheart deals (of course, there is some heavy-duty computer programming on the back-end). Online investors might even view management presentations historically reserved for institutional eyes.

One other advantage is that, at least in theory, a company can raise more money with an auction as supply meets demand. Traditionally, an investment bank comes up with a price -- usually below the perceived fair value-- so as to create a "pop" on the first day of trading (yes, this is one way favored clients and insiders make their money).

Google, on the other hand, will need all the money it can get to fight the mega players in search. Microsoft(Nasdaq: MSFT) recently evaporated the search business of LookSmart(Nasdaq: LOOK), Yahoo!(Nasdaq: YHOO) purchased Overture and Inktomi, and AMZN) is building a search business of its own.

It is impossible to predict how this will play out. Perhaps, investors will get overly enthused and take Google shares into the stratosphere. But remember, for all the progress they bring about, revolutions have a tendency to get out of control and bloody. The Google IPO will likely be no exception.

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Amazon Pays Off $200 Million (Nasdaq: AMZN) announced plans to make a $200 million debt payment today that surely sent shivers up the backs of longtime Amazon critics, only adding to the shivers they experienced earlier this week when the company announced a profit.

Bears have argued since 1997 that Amazon would (1) never earn a profit and (2) drown in debt, being unable to pay it off. Bezos and Co. are proving smarter than the naysayers, growing Amazon into a company with more than $1 billion in quarterly sales and profits even during the slower summer months.

Fresh on the heels of net income, on Nov. 24 the company will redeem $200 million in principal on its 4.75% convertible note debt, issued in 1999 and due 2009. Amazon will pay 102.85% of the original issue price, plus interest going back to August. The note debt was convertible to stock at $78 per share, well above today's $54.

The company will continue to hold $1.05 billion in convertible debt after the payment, which accounts for half its total $2 billion in long-term debt. Amazon has more than $1 billion in cash, equivalents, and marketable securities, and earns free cash flow, albeit only slightly in quarters outside the fourth.

Although the giant retailer has an accumulated deficit of $3 billion over its operating history as well as a shareholder deficit of $1.1 billion, Standard and Poor's rating service upped Amazon's outlook to "positive" yesterday and reaffirmed its corporate "B" credit rating. Profitability goes a long way to calm fears of defaulting on debt. The stock remains a high-risk investment (especially at these elevated prices), but has awarded high returns to early risk takers, rising 170% this year.

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