Does IPO Stand For Initial Pullout Offerings?
Here is the link: quote.com
Note the Ryan Jacob quote near the end - - - Steve
Nightly Business Report, Wednesday, October 28, 1998 at 21:26
SUSIE GHARIB: Well, Sprint (NYSE:FON) is the latest big name company to pull the
plug on its Initial Public Offering and for the same reason, market
conditions. Sprint hoped to sell its stock in its wireless operations, Sprint
PCS, to raise $600 million. Sprint says it might reconsider the IPO in three
or four months. The stock lost 1 and 13/16 today to 74 3/4.
JEFF YASTINE: But Sprint is not the only company to back of out an IPO. New
issues were running at the rate 44 a month before the August market high, and
there were three in September and so far, only four in October. And as Scott
Gurvey reports, that trend is expected to continue.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT, CORRESPONDENT: Five companies stuck
their toes in the IPO pool last week, but four found the water too hot to
handle. That's a far cry from the scene at the beginning of the year when
Internet companies like GeoCities (NASDAQ:GCTY) and Broadcom (NASDAQ:BRCM) saw their shares
skyrocket after initial offerings. Now the globe.com, an Internet portal
company like GeoCities has canceled its offering after a week of delays and
price cuts. Web server company Vignette withdrew its offering just three
weeks after filing. HealthyOn a provider of Internet services for the health
care industry pulled its IPO and in certainly one of the most unusual
turnarounds on Wall Street, Zapata (NYSE:ZAP) has decided to stay in its current
business, selling fish oil and fish by-products. That's because it couldn't
raise the IPO money it needed to buy its way into the Internet sector. Conoco
(NYSE:COC) was last week's lone success. Shares of DuPont's (NYSE:DD) giant oil
subsidiary gave 8 percent on their first day of trading. Conoco was special.
JOHN FITZGIBBON, EDITOR, IPO REPORTER: Conoco classic, large, brand name, big
underwriters, large issue, with institutional following if you have anything
other than that at this point in time, it's going to be difficult.
GURVEY: That does not rule out Internet companies. eBAY continues to astound
but the Online auction house has something most Internet companies do not,
profits. Still, the virtual closing of the IPO market is driving firms to
other sources of funds. HealthyOn raised $40 million in venture capital after
canceling its IPO and there is still plenty of venture and even bank money
available for investment.
RYAN JACOB, PORTFOLIO MANAGER, THE INTERNET FUND: There is still a lot of
private money around so, getting additional funding in order to maybe bridge
this gap, isn't too terrible difficult for some of the better names. So,
rather than go into a very turbulent market, they're opting to stay low for a
while and basically try their luck maybe three or six months from now.
GURVEY: There are still some companies in the Conoco class expected to issue
stock this year. Analysts are waiting for Mutual of New York Money Group, Fox
Entertainment and Ticketmaster Online.
Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
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