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Technology Stocks : Buying IPOs on the open market

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To: EightyEight who wrote (2166)	10/2/1999 2:39:00 PM
From: puborectalis	Read Replies (1) of 5529

I truly believe that this invention is like the first VCR we all wanted.I'm sure that the technology will get better and the price will drop allowing all of us to be in control of our tv viewing.Who would have thunk? Tivo IPO winners include institution shell-&-pea game By Tom Davey Redherring.com October 1, 1999 Tivo (Nasdaq: Tivo) went public Thursday and flew like an Internet stock on its first trading day. Instead of focusing on the Web, however, the company develops devices and programming services that add new features to televisions. The offering of 5.5 million shares at $16 a share yielded Tivo $88 million. Institutional investors held on until the stock rose to $42 a share before beginning to flip the stock. Volume quickly diminished. The stock peaked at $45 a share then coasted downhill to close at $29.94. "You're seeing institutions play games with day traders and unload on them," says Tom Taulli, an analyst at Internet.com. "Usually, the institutions win." Despite the roller coaster ride, it was a good day for Tivo. Its 35 million shares gave the company a market capitalization of more than $1 billion. ACQUISITION TARGET? Some analysts say Tivo's real value won't be as a standalone company, but rather as an acquisition target for its technologies. Moreover, it's a company with many downsides. Tivo's products are criticized as being too expensive for the limited number of functions they offer. To make matters worse, Tivo structured deals with some of its equity partners in a matter that requires it to pay them a specific amount of money for each of the set top boxes they sell, regardless of the selling price. "I can't imagine them prevailing as a standalone company," says Mr. Taulli. He notes that a larger vendor could more profitably integrate Tivo's technology with set-top box functions such as Internet and game console features. A key question remains: how much is Tivo worth when other companies are rapidly developing similar technologies?

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