Andover Strikes It Rich -HotWired
Hey john check this out,says they could have gone for $24 but didn't want to delay the deal since they had to refile with SEC if they wanted the $24. How lucky can we get,eh?
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by Joanna Glasner
9:50 a.m. 8.Dec.1999 PST
Andover.Net, whose network of news and discussion sites such as Slashdot.org have become a hub for the open source community, exceeded expectations Wednesday -- and still left some money on the table.
Andover sold four million shares for US$18 each, the top of its expected price range. The company netted $72 million through a process known as a Dutch auction.
But Andover could have received as much as $24 per share, said officials at W.R. Hambrecht & Co., the underwriter for the IPO.
"There was just an incredible amount of demand in the last couple of days," said Sharon Smith. "They raised more money than they intended originally from the filing range."
Andover might have opted to take the $18 to avoid delaying its IPO further. If it wanted to take the $24, it would have had to re-file forms with the Securities and Exchange Commission to up its expected share price range.
The company's stock offering was unusual because shares were made available to anybody with $2,000 to put on deposit at W.R. Hambrecht and the finances to pay for the shares.
Through a W.R. Hambrecht service called OpenIPO, interested investors place an online bid for the number of shares they want to own and the price they want to pay.
After all the bids are in, W.R. Hambrecht counts down from the highest bidder until all the shares are spoken for. Everybody above the lowest accepted bid then gets the number of shares they asked for at the lowest bid price.
The process is seen as a way to allow individual investors a chance at buying shares in new companies before they hit the market. Typically, such shares go almost exclusively to large institutional investors, who stand to profit most if share prices soar in first-day trading.
In Andover's case, Smith said, bids were divided almost evenly between individual and institutional investors.
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