I think Goldman Sachs is just doing their job by increasing the offering price. The underwriter should try to get the company the best price possible, while still leaving a decent premium for the investor as reward for the risk they take. If IVIL prices at 25, say, and it stays above 30 in the aftermarket, Goldman Sachs has done their job. As an investor, who hope to get some shares through Wit, I would love a much bigger premium, but it is not mine by right.
From briefing.com
12:15 ET ******
iVILLAGE INC. (IVIL): Institutional investors are lining up around the block to grab a piece of this deal. The initial public offering of women's online community, iVillage Inc, is one of the most hotly anticipated Internet initial public offerings so far this year. Overwhelming institutional interest has allowed the company to bump up the size of the proposed offer range from $12-$14 to $22-$24. While the shares may price in the mid-$20 range, there is little question that individual investors will have bid IVIL up at least another 100% by the time the issue opens for trading. So why all the hoopla? The two biggest things iVillage has going for it are the company's distribution and marketing deals with America Online and NBC. Both companies also hold equity position in iVillage. Financials: For the year ended December 31, IVIL logged revenue of $15.012 million, an increase of 149% from the year-ago period. The surge in revenue was driven by a more than 225% increase in Sales and Marketing spending. In fact, Sales and Marketing expenditures rose to almost twice total revenue. The company's loss from operations soared from $21.09 million in 1997 to $44.34 million in 1998. During 1998, revenues from barter transactions represented approximately 20% of total revenues. (Barter transactions do not generate any cash revenues). The company has an accumulated net deficit of $76.3 million since being launched in July of 1995. Using the high-end of the revised offer range, IVIL would carry a Price/Sales ratio of 37 and sport a market capitalization of $555 million.
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