MatrixOne debut seen strong in busy week for IPOs
February 28, 2000 04:50 PM
NEW YORK, Feb 28 (Reuters) - A busy week for initial public offerings should get off to a running start as analysts expect shares of Internet business collaboration software provider MatrixOne Inc. to post strong gains when they begin trading on Tuesday.
Based in Chelmsford, Mass., MatrixOne is selling 5 million shares in a raised projected range of $20 to $22 per share through lead underwriter Goldman, Sachs. The price range was raised from $12 to $14 per share on Feb. 25.
A crowded week for IPOs includes the highly anticipated offerings of Niku Inc., Avenue A Inc. and Palm Inc., the Palm Pilot unit of 3Com Corp. COMS
Kenan Pollack, money editor at Hoover's Online, described the quality of this week's offerings as "unbelievable."
"There's a lot of attention in the IPO market this week," he said, adding that MatrixOne should receive a lot of this week's investor demand.
Pollack was positive about the MatrixOne offering largely because of the IPO's terms.
"I like the deal because they upped the price range," he said, adding that the number of shares offered was a good sign.
"Five million shares is the perfect IPO size," he said, noting that the most successful debuts were offerings of around five million shares.
MatrixOne's software enables companies to interact over the Web with its customers, suppliers and other business partners. Ideas concerning conceptual planning, new product design and introduction can be integrated through different business processes as well.
MatrixOne software is designed to supply companies with greater and tighter integration among their engineering, manufacturing, sales and customer service departments.
Customers include Deere & Co. DE , 3Com and Honeywell International Inc. HON
Irv DeGraw, research director at WorldFinanceNet.com, predicted in a note that MatrixOne should enjoy first day gains of over 70 percent.
DeGraw compared MatrixOne with recent successful IPOs in the Internet business-to-business sector, including Centra Software Inc. CTRA and Bluestone Software Inc. BLSW .
Centra, which went public in early February, had its 5-million-share offering priced at $14 per share. Its shares were trading off 5/8 to 32-3/8 Monday afternoon on the Nasdaq, a gain of over 125 percent.
Bluestone had its 4-million-share IPO priced in September at $15 per share. Shares were 7/8 higher at 72-1/4 in Monday afternoon trading on the Nasdaq, a gain of over 380 percent.
"Given the strength of this sector and the reported pre-offering demand, expect a very favorable initial reaction followed by aftermarket appreciation," said DeGraw in the note.
For the six months ended Jan. 1, MatrixOne reported revenues of $30 million and an operating loss of $3.5 million. For the year ended July 3, the company reported revenues of $41.3 million and an operating loss of $7.7 million.
The company has applied to trade on the Nasdaq under the symbol MONE
The week's three other anticipated offerings have all applied to trade on the Nasdaq as well.
Niku has applied to trade under the symbol NIKU , Palm under the symbol PALM and Avenue A under the symbol AVEA
MatrixOne will have over 38 million shares outstanding after the IPO.
(( -- Brian Kelleher, New York Newsdesk, (212)859-1588)) REUTERS
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