IPO week ahead: Sycamore,
Satyam are standouts
By John E. Fitzgibbon Jr.
Redherring.com
October 16, 1999
This week, the IPO calendar boasts a couple of
high-profile deals and the usual slew of Internet
offerings. At press time, it looks as if 19 underwritings
are ready to step forward into the marketplace.
Among those deals, two tech
offerings have the potential for
first-day explosions: Indian ISP
Satyam Infoway (proposed
Nasdaq symbol: SIFY) and
optical networking company
Sycamore Networks (proposed
Nasdaq symbol: SCMR).
The real test of this week's IPO
calendar hinges on the Nasdaq Composite, which has
been in retreat since chalking up a record closing high
on Monday, October 11, at 2,916. The pullback had
a damping effect on last week's offerings.
When last week opened, bankers
had planned a sprinkle of deals
that would start trading on
Wednesday, a few more for
opening on Thursday, and the
balance for a Friday debut. As
the Nasdaq Composite followed
the general downward trend in the
stock market, Tuesday's deals
melted into Wednesday,
Wednesday into Thursday, and
so it went. So many of the deals
are ready to step forward, but the
big question remains: will all of them come to market?
MARTHA VS. THE UNDERTAKER
The highest-profile deals of the week are the non-tech
offerings Martha Stewart Living Omnimedia (proposed
NYSE symbol: MSO) and World Wrestling
Federation Entertainment (proposed Nasdaq symbol:
WWFE). They should do OK in the aftermarket, but
won't be joining Redherring.com's IPO Hall of Fame,
a list of companies with first-day gains of 100 percent
or better from offer price.
Morgan Stanley Dean Witter (NYSE: MWD) plans to
price 7.2 million shares of Martha Stewart Living
Omnimedia at $13 to $15 per share. The Street Poll
rates this offering as Hot.
Bear Stearns (NYSE: BSC) plans to price 10 million
shares of the WWF at $14 to $16 each. The new
issue is rated Warm.
It takes more than a dot-com for an IPO to make it in
today's market. Of this week's 19 proposed new
issues, only six are Internet-related offerings. It seemed
like only yesterday that 60 to 70 percent of the IPO
calendar was Internet-related. But that is no longer the
case. For a complete listing of upcoming deals, see our
IPO calendar.
PICKS OF THE WEEK
SG Cowen plans to offer 3.5 million shares of
Crossroads Systems (proposed Nasdaq symbol:
CRDS), a maker of storage area network (SAN)
equipment, at $11 to $13 a share. Three similar IPOs
have come to market this year -- Brocade
Communications Systems (Nasdaq: BRCD), Gadzoox
Networks (Nasdaq: ZOOX), and Vixel (Nasdaq:
VIXL) -- and each exploded for an opening-day gain
of over 100 percent. Redherring.com's Street Poll says
the deal is Warm.
Satyam Infoway expects to raise over $71 million
when Merrill Lynch (NYSE: MER) prices 4.18 million
shares at $16 to $18 each in the international securities
markets early in the week. The company is the
second-largest ISP in India, and the deal keeps getting
hotter. The Street Poll now rates it as Hot.
Sycamore Networks could be the week's top winner.
The underwriter is Morgan Stanley Dean Witter, the
size is $123.5 million, and its business is
software-based optical networking products. And
that's the magic: optical networking. Morgan Stanley
plans to price 6.5 million shares at $18 to $20 each.
The Street Poll rates the deal as Red Hot.
You've got to love the name ZapMe (proposed
Nasdaq symbol: IZAP), a Merrill Lynch offering that is
expected to raise $99 million by selling 9 million shares
priced between $10 and $12 each. The company
provides schools with free PCs, software, and Internet
access while building a broadband interactive network.
IPO traders like the concept, and the new issue is on
the most-wanted list. The deal looks Hot.
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