>>CNBC reporting..IPO window is open again..confirmed by EarthWeb IPO
"EarthWeb Reopens Market For Net IPOs" <http://www.techweb.com/wire/finance/story/INV19981111S0006?ls=inv_html> EarthWeb may have rejuvenated the market for Internet IPOs. Shares of New York-based EarthWeb, whose developer.com website provides news and files for IT professionals, more than tripled in value on its first day as a public company. The stock, trading under the symbol EWBX, closed at 48 11/16, up 34 11/16 from its initial offering price of 14. "The good Lord had his hands on the shoulders of EarthWeb today," said John Fitzgibbon, editor of IPO Reporter. "This was a big, happy, wonderful surprise."
EarthWeb picked up about $28 million cash from the public offering of 2.1 million shares. Wednesday's trading gave the company, which now has 7.9 million shares outstanding, a market capitalization of roughly $384 million. But at least one analyst downplayed the day's success. "I think this thing just got ahead of itself," said Francis Gaskins, editor of Gaskins IPO Desktop. "It's not a market leader; it's not doing anything special." EarthWeb competes with sites such as ZDNet, Cnet, IDG.net, and TechWeb's parent site, CMPnet. Although those competitors -- three of which are owned by magazine publishers -- contain a wider breadth of content, EarthWeb offers better interactive services, community forums, and more complete information on certain topics, said Eric Brown, senior analyst for Forrester Research. "That gives EarthWeb a relatively unique value proposition in the marketplace," Brown said. "It is also in the business of generating content, and as such, is bridging the collaboration, community and publishing models. EarthWeb can put together specific, highly targeted channels in very focused areas."
Wednesday's investors probably weren't scrutinizing EarthWeb's business model closely, Gaskins said. Rather, the company benefited from the recent resurgence of Internet stocks in general. "There's nothing else in the IPO pipeline right now, except for Marketwatch, that's a pure Internet play," Gaskins said. Unlike the last Internet company to go public, eBay <http://www.techweb.com/wire/finance/story/INV19980924S0006>, EarthWeb is not profitable. EarthWeb lost $5.27 million on sales of $1.92 million for the first three quarters of 1998. The website generates revenue from advertising, with 20 companies providing 59 percent of total sales. Two advertisers, Microsoft and IBM, make up 24 percent of EarthWeb's business. But EarthWeb's lack of profits makes it a more typical Internet stock, so Wednesday's showing will probably encourage other Internet companies to try the IPO route.
"They just needed somebody to show them the way," Fitzgibbon said. "EarthWeb came along."
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