Stock Offerings Start 1999 With Marketwatch.Com
techstocks.com
Monday January 11 12:28 AM ET
Stock Offerings Start 1999 With Marketwatch.Com
By Reshma Kapadia
NEW YORK (Reuters) - Against the backdrop of a frenzy for Internet stocks, the 1999 initial public offering market is expected to get off to a sizzling start this week with online business news provider Marketwatch.com Inc.
Marketwatch.com, scheduled to go public late this week, was formed as a joint venture between CBS Corp. (NYSE:CBS - news) and Data Broadcasting Corp. (Nasdaq:DBCC - news), whose stock has nearly doubled amid the buzz of the IPO.
The company is offering 2.75 million shares through lead underwriter BT Alex Brown at an expected price range of $10 to $12 a share.
Analysts said the CBS and Data Broadcasting backing is part of the reason the IPO is expected to be so successful. CBS will provide $30 million in advertising on CBS network and channels.
''Marketwatch is unique because they have the backing of CBS and there are a lot of sites that don't have that,'' said Steve Tekieran, an analyst at Standard & Poor. ''They have the brand, logo and backing of a major player in the news industry. It is still going to be tough because there is a lot of competition in the business, but they are well-positioned because Data Broadcasting provides the technological infrastructure and CBS provides the marketing tool.''
The fact that Marketwatch.com is an Internet company already gives it a firm head start in the environment where companies with links to the Internet see their stocks skyrocket.
''It seems like investors are ready for more and just judging from how stock prices have been trading, it seems like investors have not been sated. The appetite for Internet stocks is still there,'' said Peony Kao, an analyst at the Renaissance IPO Fund
Companies, especially Internet firms, are going to take advantage of the current stock and Internet frenzy seen so far this year, analysts said.
''There is much more activity this year than last year and Internet companies are taking advantage of the fact that investors want Internet stocks so they are moving forward (with the deals) as best as they can. It is in their best interest to lock up that demand for the stock,'' Kao said.
Internet service provider Pacific Internet, whose offering was originally scheduled for late 1998, is slated to come to market in next couple weeks.
The Singapore-based company postponed its offering to January due to SEC filing delays and the holidays, analysts said. It's size has been raised to 3.0 million shares from 2.5 million shares at a price range of $15 to $17, up from the expected $13 to $15 offering, reflecting expected demand. Lehman Brothers is the lead underwriter on the deal.
Software firm Allaire Corp.'s public offering is also expected to be a strong one, analysts said. It is expected to price 2.2 million shares in a range of $15 to $17 in the week of Jan. 21 through lead underwriter CS First Boston.
Other deals that are expected to reflect the strength of the IPO market in the first quarter are online travel service Priceline.com and speech recognition maker Dragon Systems Inc. Morgan Stanley is the lead underwriter on both deals, which are slated for February. Terms have yet to be determined
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