IPO From Internet Advertiser Modem Media.Poppe
Tyson Draws Buyers
NEW YORK -(Dow Jones)- An initial share offering from Internet advertising company Modem
Media.Poppe Tyson Inc. was well received Friday.
The 2.6 million class A common shares (MMPT) closed their first day of trading at $45, nearly three
times the offering price of $16. Nasdaq volume was 4.7 million shares.
Modem Media, based in Westport, Conn., is 70%-owned by True North Communications Inc. (TNO),
the world's sixth-largest ad company. True North, based in Chicago, is the parent company of the
Foote, Cone & Belding, Bozell Worldwide and Temerlin McClain ad agencies.
True North will retain control of Modem Media after the IPO, holding heavy-voting B shares.
Modem Media.Poppe Tyson was formed earlier this year, when True North merged the nine-year-old
Modem Media with Poppe Tyson, acquired as part of Bozell, Jacobs, Kenyon & Eckhardt.
Modem Media creates online ads for more than 30 clients, but the top five account for more than half its
revenue. Clients include such heavyweights as AT&T Corp. (20% of nine-month revenue), Citigroup's
Citibank (12%), Unilever NV, International Business Machines Corp. and Intel Corp.
According to filings, Modem Media's loss for the latest nine-month period shrank to $2 million, while
pro-forma revenue rose 46% to $30.4 million.
The lack of profit is common with young companies doing business on the Web. But that hasn't
discouraged investors from snapping up shares of Internet-related companies, particularly in IPOs.
Last February, another Internet ad firm, DoubleClick Inc., launched an IPO at priced at $17 and the
stock closed its first day of trading at $26.75, a 57% premium. The shares now are trading in the $90
range.
Many investors are betting that strong revenue growth and increasing acceptance of the Web eventually
will translate into substantial profits. But the stratospheric stock gains of a number of unproven
companies over the past year has many observers sounding cautious notes lately.
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