Is someone missing from this article? Must be one of those" 21 others..."
GeoCities, 21 Others Plan $1.97 Bln in IPOs Next Week (Update1)
Bloomberg News
August 7, 1998, 11:55 a.m. PT
GeoCities, 21 Others Plan $1.97 Bln in IPOs Next Week (Update1)
(Updates with number of new issues and capital to be raised
in 3rd paragraph.)
New York, Aug. 7 (Bloomberg) -- GeoCities and other issuers
are sticking to plans for initial stock sales next week,
following several days of market volatility that caused at least
a dozen companies to postpone initial public offerings.
GeoCities, a host for advertising-supported Internet
''communities,'' plans to raise $61.8 million on Monday.
Convergys Corp., which handles billing and customer management
for clients, plans to raise $324 million on Tuesday, while 24/7
Media Inc., an Internet advertising company, plans to raise $42.3
million on Wednesday. CitySearch Inc., an operator of online city
guides that provide restaurant reviews, plans to raise $48
million next week.
These and 18 other issues scheduled to raise $1.97 billion
next week will face an audience of investors grown increasingly
cautious following the stock market's wide swings this week.
Yesterday, nine out of 12 companies delayed initial stock sales
scheduled for that day.
The IPO market is ''like Missouri, the Show-Me state,'' said
Ted Hatfield, a director at Credit Suisse First Boston Corp.
''Any time there's market volatility, (the buying community)
tends to retrench and be more selective. That's probably been
evidenced by some of the transactions that haven't been executed
this week.''
''We will be more skeptical with deals with high valuations
and at the margin we'll probably be more conservative'' in the
next few weeks, said Thomas Bleakley, a portfolio manager at
Nicholas-Applegate in San Diego with more than $3.5 billion in
small-capitalization stocks under management.
Still, ''we're not going to completely hold off,'' he said.
''We're going to participate in investing in companies where we
feel the drivers are fundamentally strong.''
All Affected
New issues able to be brought in a rough market often tend
to come from higher-quality companies, Bleakley said. Still,
investors wonder why there is urgency to bring the deal to market
when the environment is tough. Also, they may be able to buy the
IPO at below its sale price once it starts trading, as new issues
in rough markets frequently decline.
Natural Nutrition Group Inc., a producer of natural and
organic foods, Open Solutions Inc., a software company, and Pacer
International Inc., a shipping company, were among the companies
that postponed their IPOs yesterday.
The three companies that did go ahead with their initial
stock sales yesterday raised less than originally planned.
NationsRent Inc., an equipment-rental company, priced $2
below the bottom of the expected $10-$12 range, raising $104
million rather than the $143 million expected.
Eclipsys Corp., a health-care information technology
company, raised $63 million rather than $79.9 million.
Information Holdings Inc., an information publishing business,
priced $2.50 below the bottom of the expected $14.50 to $16.50
range, raising $51 million rather than $65.9 million.
The IPO market ''is being weeded,'' Hatfield said. ''A
number of deals are being postponed, a number downsized. That is
a normal weeding process whenever the secondary market shows
volatility. It's nothing really that new or that exciting because
we have been through these periods before.''
The new issues market probably will pick up after Labor
Day, he said.
''A relaxing vacation for people who have been challenged
daily by both the secondary and new issues market is probably
due, and being the last two weeks of August are right around the
corner, that's probably what's going to happen. I would expect
people to return post-Labor Day rested.''
--Per H. Jebsen in the New York newsroom (212) 893-3368/ltk
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