MarketWatch IPO May Soar to Match Data Broadcasting (Update2)
Paul:
Interesting take on MarketWatch IPO from Bloomberg.
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Technology News
Mon, 11 Jan 1999, 8:45pm EST
MarketWatch IPO May Soar to Match Data Broadcasting (Update2)
(Adds comment by analyst Peony Kao in 11th paragraph.)
New York, Jan. 11 (Bloomberg) -- MarketWatch.com Inc. shares
could soar as much as 19-fold after the company's initial public
sale this week, based on the surge in shares of Data Broadcasting
Corp., which owns half the Internet company.
Shares of Midvale, Utah-based Data Broadcasting, which sells
financial market data to individuals via satellite and cable,
have more than quadrupled since mid-December and rose 12 1/16 to
38 7/16. It was the most active U.S. stock with 34.4 million
shares changing hands, 12 times its three-month daily average.
Today's 46-percent rise follows a 33-percent increase Friday,
when 30.4 million shares traded.
Assuming all the $964.9 million increase in the market value
of Data Broadcasting's shares since mid-December is in
anticipation of the MarketWatch.com IPO, it implies a market
value of $214 for each of the 4.5 million MarketWatch.com shares
Data Broadcasting will hold after the sale. MarketWatch.com,
formed in late 1997, plans to sell 2.8 million shares for $10 to
$12 each on Thursday. That would raise $30.8 million if the
shares sell at $11 each.
''The main reason Data Broadcasting is surging is because of
the MarketWatch.com IPO slated for this week,'' said Steven Tuen,
research director at IPO Value Monitor. ''MarketWatch.com is a
rapidly growing financial Web site, and as we've seen in the last
couple of months, the appetite for financial news and information
has grown, especially among individual investors.''
CBS, which owns the other half of MarketWatch.com, rose 3/8
to 35 1/2. Data Broadcasting and CBS will each own 38 percent of
the company following the IPO.
The run-up in Internet stocks has exceeded the increases in
share prices of some non-Internet parent companies. If that were
to hold true for MarketWatch.com, its shares would rise even more
than indicated by the increase in Data Broadcasting's stock.
Ubid, Creative Computers
Creative Computers Inc., a Torrance, California-based
catalog company that sells computer software and hardware, has a
market capitalization roughly half the value of its 80-percent
stake in Ubid Ind., an Elk Grove Village, Illinois-based online
auctioneer of computer merchandise.
Tech Squared Inc., a Minneapolis-based distributor of
computer hardware, has a market capitalization less than half the
value of its 16-percent stake in Eden Prairie, Minnesota-based
Digital River Inc., which helps software publishers sell their
products over the Internet.
If MarketWatch.com's shares ultimately rise as much as the
increase in Data Broadcasting's shares indicates,
then the IPO will prove even more successful than last year's
most successful IPO, by online auctioneer EBay Inc., which is up
16-fold from its September issue price.
Such an outcome would give fledgling MarketWatch.com a
market capitalization of about $2.51 billion.
Investor Demand
''Individual investors would buy the shares at higher
valuations given their behavior with other Internet stocks,''
said Peony Kao, an analyst with Renaissance Capital Corp. in
Greenwich, Connecticut. She said there is ''a lot of interest in
this deal among investment managers'' who believe MarketWatch.com
is a strong company.
MarketWatch.com, which operates the CBS.MarketWatch.com
Internet site, has more than 40 journalists providing business
and financial commentary. It's licensed to use the CBS name, logo
and news content, and also benefits from a marketing agreement
with CBS.
bloomberg.com
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