All eyes on broadcast.com
PointCast IPO withdrawal seen having little impact
By Darren Chervitz, CBS MarketWatch
Last Update: 02:10 PM July 16, 1998
NEW YORK (CBS.MW) -- Internet pioneer PointCast may have dropped its plans to go public, but analysts believe that will do little to
dampen the enthusiasm for the upcoming debut of broadcast.com.
The Dallas-based aggregator of audio and video streaming content on the Internet raised the expected price range of its 2.5 million share
offering on Wednesday to $14 to $16 per share, up from the original $11 to $13 range.
"What does that mean? Moonshot," said John Fitzgibbon, editor of the IPO Reporter. "(The PointCast withdrawal) is nothing. No effect at all."
Fitzgibbon sees the stock opening for trading "as high as 30." The IPO is scheduled to price by lead underwriter Morgan Stanley Dean Witter Thursday night for trading on Friday.
Not all analysts are gung-ho about the broadcast.com offering. Ryan
Jacob, research director at IPO Value Monitor and portfolio manager of
The Internet Fund, said bandwidth limitations should hamper the
company's short-term prospects while access to content may be a
problem in the future. "There are serious question marks here," said
Jacob.
The company has the right to content produced by most major
professional and college sports teams and leagues, more than 300 radio
stations, 200 record labels and 17 television networks. Few of these
agreements are exclusive, however, and competitors such as
RealNetworks have relationships with many of the same entities.
Jacob points out that the rights to this content will likely become more expensive as the Internet becomes faster and more popular, noting the billions of dollars the television networks have spent keep programming such as the National Football League or ER. (See analysis of Broadcast.com.)
Aside from broadcast.com, a number of other Internet-related companies
are preparing to go public, even with PointCast's withdrawal. A Goldman Sachs-led IPO for GeoCities could even draw more interest than
broadcast.com when it makes its debut next week. |
