World markets in the grip of dot-com fever
Braced for busy week: Even large investors left out in the cold in scramble for stock
Stephen Miles
Financial Post, with files from news services
The Associated Press
German semiconductor maker Infineon Technologies is set to explode on the market on Monday.
Investors' insatiable appetite for hot new tech stocks will create more mayhem next week as two huge global offerings come to market and Wall Street braces for one of its busiest weeks for new issues.
The dot-com phenomenon that has swept the U.S. in the past year and sent the Nasdaq to record levels has circled the globe.
The frenzy over initial public offerings hit a peak in Hong Kong when riot police were forced to erect crowd control barricades and post armed guards as almost half a million people converged on bank branches to lodge applications for shares in Tom.com Ltd. -- Asia's hottest new Internet start-up. The issue, which was more than 670 times oversubscribed, more than quadrupled from its IPO price of $1.78 (HK) to close at $7.75 (HK) on its first day of trading on Thursday.
"The dot-com mania that has gripped Americans in the past few years has gone global," said Vincent Lepine, senior economist at National Bank Financial. "Investors are rushing out of the old economy and into the new."
The fever reached higher temperatures yesterday. In France, Web portal MultiMania rose 182% above its IPO price of 36 euros after its offering was more than 70 times oversubscribed. And Canadian telecommunications firm GT Group Telecom Inc. made its debut in Toronto and New York as one of the most successful IPOs in Canada's history.
Even high-profile money managers -- like Veronika Hirsch, president of money management firm Hirsch Asset Management Corp.-- complained they were unable to get a piece of the IPO.
A buying frenzy prevented MultiMania stock from making its debut, as planned, on Thursday. ParisBourse, the Paris exchange's regulatory authority, was forced to raise trading limits four times yesterday before the shares could start trading.
Two huge European share sales next week should add fuel to the already white-hot IPO market.
Amsterdam-based World Online is likely to become the world's biggest Internet IPO when it makes its debut on Friday, and computer chipmaker Infineon Technologies AG should become Germany's second-biggest share flotation when it steps out on Monday.
Brokers are predicting pandemonium when Infineon hits the market on Frankfurt and New York exchanges.
"It's utterly insane, completely perverse," said one Frankfurt-based equities sales manager of the unprecedented demand for the stock. "Every second phone call I get is about Infineon."
Infineon has priced its IPO in a range of 29 to 35 euros per share and is floating 26% of its stock. It will also issue 17 million new shares. The deal is likely to raise about 6-billion euros, second only in Germany to the 1996 Deutsche Telekom AG IPO, which was worth 10-billion euros.
World Online shares traded at triple the indicated price for the IPO in "grey market" trading yesterday. The stock has climbed steadily since it began trading two days ago, touching 135 euros, way above the 35 to 43 euro range set by the company.
World Online, an Internet service provider in 15 countries, has said the float could value it at more than 12.1-billion euros.
In the U.S., two other hot technology issues came bounding out of the gate yesterday.
Selectica Inc., which makes software products that help companies sell products online, saw its shares (SLTC/NASDAQ) more than quadruple from the IPO price. They hit a peak of $154 7/16 before closing up $111 15/16 at $141 15/16 (US). Internet software maker OTG Software Inc. (OTGS/NASDAQ) rose $37 3/16 to $56 3/16 (US).
The market action comes at a time when Wall Street is bracing for one of the busiest IPO weeks in history. More than 20 new issues will make their public debuts next week, in deals worth about $7-billion (US).
There have been 77 IPOs in the U.S. so far this year, worth $12.8-billion (US). But new issues still have a long way to go to match last year's record of 527 IPOs that reeled in $100.7-billion (US) in proceeds.
In Canada, there have been 24 new issues since Jan. 1, 2000, worth more than $833-million. Last year, 195 Canadian firms went public in deals worth $6.3-billion. In 1998, 243 firms were listed on Canadian exchanges in deals worth $4.5-billion. |
