Update on recent IPO's:
Sunday December 6, 6:00 pm Eastern Time
IPO VIEW-More hot deals seen after
watershed week
By Holly Rosenkrantz
NEW YORK, Dec 6 (Reuters) - After one of the strongest weeks
for new issues in a while, underwriters are expected to roll out
many potentially hot deals to get in on a market that has bounced
back from its worst slump in years.
This week, five Internet companies are scheduled to go public, and
following a pattern in cyber-offerings, nearly all are expected to
soar.
And in what is set to be the last giant offering of 1998, CBS Corp.'s (NYSE:CBS - news) radio unit
Infinity Broadcasting Corp. is slated to hit the market in a deal designed to raise between $2.565 and
$2.97 billion -- one of the biggest U.S. IPOs ever.
''Infinity is certainly a good deal in good shape, but it's not the deal of the week by any far stretch of
the imagination,'' said John Fitzgibbon, editor of the IPO Reporter newsletter. ''The play in town is
Internet, Internet, Internet.''
The five Internet companies expected this week are Xoom.com (XOOM - news), AboveNet Comm
(ABOV - news), Exchange Applications (EXAP - news), Internet America (OTC BB:PUNK - news),
and Infospace.Com (INSP - news). Next week, Audiohighway.com (AHWY - news) will debut.
Indeed, the sizzle in this past week's IPO market came from two Internet start-ups, Ticketmaster
Online CitySearch Inc. (Nasdaq:TMCS - news) and uBid Inc. (Nasdaq:UBID - news). Both joined the
ranks of high-flying cyberstocks, posting gains of over 200 percent after their IPOs.
But analysts said what made this such a watershed week for IPOs was the debut of two companies
that have nothing to do with technology -- upscale restaurant chain P.F. Chang's China Bistro Inc.
(Nasdaq:PFCB - news) and mattress company Select Comfort Corp. (Nasdaq:AIRB - news). Both
companies jumped several points from their IPO price.
''That is dramatically significant,'' said David Menlow, president of the IPO Financial Network in
Springfield, N.J. ''It shows investors are feeling safe again and are looking to jump back into the
market. They're willing to participate in deals other than the Internet.''
In recent months, investors have been willing to look at a handful of non-Internet related new issues --
but only if they are from well-known, profitable companies.
Infinity, which owns 161 radio stations in 34 markets, is seen appealing to those IPO investors who
prefer less risky offerings.
The deal is expected to attract institutional buyers and media-related mutual funds who will hold onto
shares for the long haul, and not the investors who get in on new stocks with the hopes of making a
fast profit.
''Lately, anyone buying any IPO is likely to have his eye on the exit within the first day of trading,'' said
Ben Holmes, an analysts at ipoPros in Boulder, Colo.
''It's a natural reaction to the frothy premiums we have seen in the IPO market recently,'' he added.
''Year-end window-dressing will dictate that fund managers book any easy profits and show it on their
1998 bottom line.''
Because of the huge size of their deals, mega-IPOs like the one from Infinity are not a way to make a
quick profit. Shares of the year's biggest IPOs -- Conoco Inc. (NYSE:COC - news), Fox
Entertainment Group (NYSE:FOX - news), USEC Inc. (NYSE:USU - news) -- have not risen
significantly above their offering prices.
Meanwhile, the 42-45-point jumps in this past week's Internet deals were viewed by some as
disappointing compared to 71- and 88-point gains in shares of two hot cyber-IPOs of recent weeks,
EarthWeb Inc. (Nasdaq:EWBX - news) and theglobe.com (Nasdaq:TGLO - news).
Shares of uBid's parent Creative Computers Corp. (Nasdaq:MALL - news) dropped 9 points to 26-1/4
Friday, and analysts said it was because of disappointment over the spin-off's debut.
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