SCHWAB IPO ALERT THREAD Message Board

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Technology Stocks : SCHWAB IPO ALERT THREAD

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To: Topannuity who started this subject	1/31/2001 12:47:45 AM
From: OverUnder	Read Replies (1) of 2276

Schwab has the KPMG Consulting IPO. The anticipated symbol is KCIN. This convoluted deal is expected to go public the week of Feb. 5th. Interesting statistics: Shares being issues: 112 million (!!) plus an additional 16.8 million shares to cover over allotments Total approx. # of shares outstanding after the offering: 152.1 million ==> Market cap upon offering = 2.585 Billion This offering is interesting because NONE of the proceeds is expected to be retained in the issuer. The parent (KMPG LLP) and Cisco end up with all the cash. Also, if the overallotment option isn't exercised, then there are another 20 or so million shares that are expected to be sold in the following year (to meet independence requirements of KPMG LLP). There are an additional 10.9 million shares already issuable upon exercise of options and they anticipate offering to their employees options on up to 17.3 million shares at an exercise equal to the offering price per share. Their financial statements are obtuse, due to their prior formation as a partnership. However, they do list proforma earnings for the year ended June 30th 2000 of $.21 a share and first 2001 quarter earnings of $.14 a share. Trailing 12 months earnings are $.25. At $17, this gives them a P/E of 68!! June 30, 2000 revenues were 2.37 billion which works out to about $15.58 a share. Given their revenue growth in their first quarter, it looks like they're coming to market at a revenue multiple of roughly 1 (not counting known dilution). An interesting public company comparison is Sapient (an "e-services consultancy providing Internet strategy consulting and sophisticated Internet-based solutions to Global 1000 companies and startup businesses"). Sapient's market cap is also around $2 billion on 500 million in revenue. They earned .06 in their most recent quarter and currently trade at $17. Sapient has about 2000 professionals to KCIN's 9000 professionals. If you want to own KCIN, I think there will be ample opportunity post IPO. What to others think?

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