"Broadcast.com hopes to revive IPO market's romance with the Web"
CNNFN, digital data, July 13, 1998: 2:50 p.m. ET
NEW YORK (CNNfn) - Last week's
heart-stopping seesaw performance in the Internet
sector was enough to keep online companies in the
IPO spotlight for some time, with enthusiasm filling
six out of the seven best-performing offerings of the
year with 'Net-related stocks.
One of the secrets of success for the typical
Internet IPO is high demand and low supply. Since
most Internet stocks are closely held by employees
and other start-up insiders, only a small percentage
of existing shares is traded on the public market,
driving scarcity and lifting prices.
Internet offering de jour
Barring a broader market fallout or another
serious bout of Asian economic jitters,
Broadcast.com (proposed ticker symbol: BCST) is
almost certain to get some mileage out of the
continuing Internet zeal.
Broadcast.com offers audio and video
programming, including sports, talk and music radio,
television, business events - all for free and on
demand via the Internet.
Formerly known as Audio Net, the company
shed its music-only image by changing its name to
Broadcast.com back in May, underscoring the
importance of brand recognition in the race to
capture an online audience.
"If they're out there now, people are starting to
bookmark the sites, " said Ken Fleming, IPO analyst
at Renaissance Capital, an IPO and mutual fund
research firm. "They want to be a major destination
on the Web."
Still other analysts worry that Broadcast.com may
be trounced when larger media companies extend
their franchises onto the Web.
Fleming's upbeat assessment of Broadcast.com is
based mostly on the grounds of "hot stock by
Internet-association" and not so much on the
company's fundamentals or prospects - and even he
stopped short of holding out hope of an
Inktomi-style (INKT) performance.
However, if online sports broadcaster
Sportsline.com is a reasonable gauge,
Broadcast.com's stock should be well received.
Sportsline.com (SPLN) is up 300 percent this year,
and at its current capitalization-to-revenues ratio is
trading well above Broadcast.com's prospective
price.
Broadcast.com is set to float 2.5 million shares at
$11-$13, giving it a market capitalization of about
$215 million on an accumulated deficit of $12 million
and estimated 1998 revenues of $13.5 million. |
