By Reshma Kapadia
NEW YORK, June 18 (Reuters) - A flurry of Internet-related
stocks made their debuts on Friday but the reception was mixed,
as only two -- GoTo.com Inc. <GOTO.O> and Viant Inc.<VIAN.O> --
posted strong gains after their initial public offerings.
Shares of GoTo.com, with a niche in the Internet search
engine area, and Viant, with its footing in the growing
industry of e-commerce enabling services, each climbed about 50
percent, even though concerns about a U.S. interest rate
increase and earnings warnings weighed on the overall stock
market.
GoTo.com closed on the Nasdaq $7.375 higher at $22.375
after its $15-per-share IPO. Earlier, it rose as high as
$28.50.
Viant closed up $8.375 at $24.375 after its $16-per-share
IPO. Earlier it rose as high as $29.50 on Nasdaq.
The deals succeeded, analysts said, because of the
perception that their business models were sound.
Goto.com, which provides an online marketplace that matches
advertisers to consumers who use keywords to search the
Internet, raised $90 million through the offering. Advertisers
bid in an auction for placement in the searches, and they pay
Goto.com when consumers click on their site.
"It's a new twist on an old theme and investors like that
stuff," said Steven Tuen, an analyst at IPO Value Monitor. He
also noted the growing shift toward result-oriented advertising
from online banner advertising.
GoTo.com investors appeared look past a wariness
surrounding Internet issues in general this week, after an
outage at online auctioneer eBay Inc. <EBAY.O> and growing
concerns about waning growth among online brokers.
Interest rate hike concerns also sparked worries about the
lofty valuations for Internet stocks. An increase in rates
could lead to a shift into cyclical stocks and out of growth
stocks.
With many other IPOs being delayed and expected price
ranges being cut, Goto.com and Viant priced their offerings at
the top of price ranges that had been revised higher -- a clue
that strong demand would emerge for the stocks, analysts said.
Viant, which offers services to companies that want to do
business over the Internet, raised $48 million in its offering
led by Goldman Sachs. The e-commerce enabling industry, which
includes consulting and design work, has exploded as large,
traditional companies try to incorporate the Internet into
their business models.
"The strong opening of Viant exemplifies that people are
very much interested in the Internet sector," said David Menlow
of the IPO Financial Network, based in Millburn, N.J.
Even so, people are still wary of the downward movement of
Internet stocks, Menlow said, "And the market is intolerant of
deals that are not unique."
Mail.com Inc. <MAIL.O>, another stock making its debut on
Friday, eked out a small gain, but analysts attributed the move
to the decrease in its expected price range prior to pricing.
The e-mail provider priced 6.85 million shares at $7, the
middle of its revised range. It had previously filed to offer
the shares in a range of $10 to $12. The stock ended up $1.75
at $8.75.
Mail.com "priced way below (its initial) range, which shows
how hard it is to get a deal done," Tuen said. "The perception
was that they undercut themselves a bit too much to ensure a
pop."
The day's other newcomers did not fare as well. Internet
services provider AppNet Systems Inc.<APNT.O> was unchanged
from its offering price of $12, the bottom of its range.
Student Advantage Inc.<STAD.O>, which offers membership
programs to meet college students' needs, was also unchanged
from its $8 pricing. The deal, which was led by BancBoston
Robertson Stephens, priced below its expected range.
Streamline.com <SLNE.O>, which allows people to run errands
over the Internet, fell below its offering price of $10, the
low end of its expected range. It also cut the size of the
deal, offering 4.5 million shares versus 4.0 million shares.
The stock ended down $2.375 to $7.625.
"Streamline.com should never have come to market. The
writing was on the wall on that deal," said Vincent Slavin, an
analyst at Cantor Fitzgerald.
859-1730))
REUTERS
Rtr 18:13 06-18-99
Copyright 1999, Reuters News Service
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REUTERS
Rtr 18:15 06-18-99
Copyright 1999, Reuters News Service
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