There may be a short term trading opportunity here but this one is probably a long term bust. From CNET News:
news.cnet.com
Webvan's shares sink after IPO frenzy
By Dawn Kawamoto
Staff Writer, CNET News.com
November 16, 1999, 1:30 p.m. PT update
After a rip-roaring ride down the IPO highway more than a week ago, Webvan has seen its stock blow a flat.
Shares in the online grocer closed down 2.12 at 16.06--near their offering price of 15--despite a successful first day performance that reached as high as 34.
Many investors had eagerly anticipated the public offering, which followed a delay because of concerns by the Securities and Exchange Commission over publicity surrounding the offering.
"Usually a stock will settle in about four to six weeks after going out because the quiet period has ended," said Jeff Hirschkorn, a senior analyst with IPO.com. "But they're still in their quiet period. I think people are developing a lot of skepticism whether they can make this model work. It's a risky proposition since they need a lot of money."
Webvan, which raised $375 million in the offering, also may be garnering concern that its performance on Wall Street will mirror that of competitors Peapod and Streamline.com.
Peapod, a pioneer in the field that debuted in 1997, and Streamline, which went public in July, are trading off their 52-week highs.
"A lot of companies fall near their offer price and then take off," Hirschkorn said. "This might be one, but I think not." |
