IPO Market Faces Holiday Lull; Revival Expected
in January
Bloomberg News
December 11, 1998, 1:27 p.m. PT
IPO Market Faces Holiday Lull; Revival Expected in January
New York, Dec. 11 (Bloomberg) -- The pace of initial public
offerings will slow next week as investors and company treasurers
pull back from the market in advance of the year-end holiday
season.
Next week's two largest sales are $32.6 million by Concur
Technolgies Inc., a maker of software for travel and
entertainment expense forms, and $40 million by InfoSpace.com
Inc., which provides maps, yellow pages, and stock quotes for Web
sites.
Strong demand the past two weeks for 14 new stock issues
totaling $3.41 billion leads some analysts to expect the recent
pace to resume early next year.
''Next year will start out just fine,'' said Howard Posner,
manager of the equity syndicate desk at A.G. Edwards Inc. a St.
Louis-based securities firm. So long as the stock market is
stable, ''there'll be a greater tendency to bring issues to the
market.''
Among next week's sales, Concur plans to sell 3.1 million
shares at $9.50 to $11.50 each on Tuesday, through securities
firms led by BancBoston Robertson Stephens. InfoSpace.com plans
to sell 4 million shares at $9 to $11 each early in the week
through Hambrecht & Quist LLC. Both Concur and InfoSpace.com are
based in Redmond, Washington.
The lull in sales may last until mid-January when investors
are more attentive and companies have time to compile their year-
end financial reports, Posner said.
The spate of sales the past two weeks was led by Infinity
Broadcasting Corp., home of the Howard Stern and Don Imus shows,
which raised $2.87 billion Wednesday in the third-largest initial
public offering by a U.S. company. The shares rose 13 percent in
the first day of trading.
Several smaller sales by Internet companies soared in their
first day of trading. Ticketmaster Online-CitySearch Inc., an
online seller of tickets and city guides, almost tripled.
Xoom.com Inc., an Internet shopping company, more than doubled.
Not Just Internet Companies
Some small companies that have nothing to do with the
Internet issued equity for the first time. P.F. Chang's China
Bistro Inc., a Phoenix-based restaurant chain with 20 outlets,
raised $49.8 million. Select Comfort Corp., a maker of air
mattresses in Minneapolis, raised $68 million.
The outlook for shares of Internet companies planning sales,
such as Modem Media.Poppe Tyson Inc., an online advertising
agency, depends on demand from individual investors,
institutional investors and securities analysts say. Because most
recent Internet IPOs have fallen since the end of their first day
of trading, many individual investors who bought after trading
began, have losses.
Theglobe.com Inc., a Web ''community'' whose shares rose to
as high as 97 in first-day trading, has since fallen to 33. Ubid,
an on-line auctioneer, closed at 36 1/2, down from a close of 48
in its first day of trading.
''We're entering one of those periods ... where Internet IPO
investing is becoming more difficult,'' said Paul Cook, the
portfolio manager of the Munder Netnet Fund, which has about $200
million of Internet-related stocks under management. ''The
quality of deals has come down in general ... and investors that
have participated in the secondary market haven't done as well of
late.''
Some analysts say Internet stocks were pushed higher in
early trading by online buying of individuals who are enamored of
all things related to the Internet. Amid publicity about first-
day gains of those stocks, they have not paid enough attention to
the companies' earnings prospects.
''That's a dangerous way to invest,'' said Cook.
--Per H. Jebsen in the New York newsroom (212) 893-3368/mq
|
