From Briefing:
ALLAIRE CORP (ALLR): Shares of Web-based development tools software company are scheduled to debut this week. CS First Boston is serving as lead-underwriter of the 2.2 million share offering, which is expected to price between $15 and $17 per share. Based on offering's discounted valuation relative to other recent Internet initial public offerings, it is likely that the range will be raised and that ALLR shares will soar on their first day of trading. The Cambridge, MA-based company designs application development and server products, ranging from software used to build static Web pages to that utilized in the development of interactive Web applications. The company's flagship ColdFusion product line employs an easy to learn software development language that allows Web developers to quickly and efficiently create Web applications. The company has sold more than 30,000 ColdFusion application server licenses and 100,000 licenses for its HomeSite Web design tool. Why So Cheap?: At less than 10 times trailing revenues (based on $16 offering price), Allaire would come to market at a deep discount to majority of Internet deals we have seen over the past year. We would suspect that discounted pricing is a result of Microsoft presence in the Web development products market. In fact, within the company's prospectus, Allaire warns that Microsoft's presence could substantially increase competitive pressure in the market, which may result in price reductions in Allaire's products and could also materially reduce Allaire's market share. Allaire believes that Microsoft will continue to incorporate Web application server technology into its operating system software, possibly at no additional cost to its users. Coincidentally, Microsoft announcing today that FrontPage 2000, the company's Web design software, will be released early this year, at a price of $140, with upgrades costing $49.95. Allaire also competes with other large software developers such as Netscape, IBM, Oracle, Sybase and Informix.
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