Yet more coverage...REUTERS...can you say CRAZE?
Sunday March 21, 2:12 pm Eastern Time
IPO VIEW - Internet auto dealer race is hot ticket
By Jennifer Shaw
NEW YORK, March 21 (Reuters) - Two companies that sell automobiles on the information superhighway are racing to debut their shares on Wall Street this week -- and investors are lining up for tickets.
''There are institutional clients who want to buy them,'' Vincent Slavin of Cantor Fitzgerald, said. ''One of my clients really likes the deal because of the services they provide and because of the the price points.''
In one lane is Internet autodealer Autobytel.com, underwritten by Alex. Brown. In the other, Autoweb.com, with CS First Boston its underwriter.
''We have dueling underwriters, dueling concepts,'' David Menlow, president of IPO Financial Network in Millburn, N.J., said. ''It's a battle out there. The perception is the Autobytel is the granddaddy of this subset. I don't necessarily think its going to create competition.''
Internet auto sellers are gaining in popularity because of their competitive prices and because people enjoy shopping for vehicles without feeling pressured by aggressive sales people.
''The companies feel that what drives the market is price,'' Menlow said, adding that customers are happy not to be ''manacled to the desk'' by zealous staff.
''They will call you of course and they are well rehearsed on how to convert an Internet sale but on the phone, one is less persistent than in person,'' Menlow added.
On the downside, one can hardly take a car for a test drive over the Internet.
''You can't kick the tires and you can't take it for a spin. I just don't get it,'' Vincent Slavin of Cantor Fitzgerald said. ''But these deals are going to work.''
Both companies are generating a lot of buzz on Wall Street. They are relatively similar in terms of their product and revenue stream, although Autobytel is slightly larger.
''They have revenues but they are not making money,'' Menlow said. Both companies had revenues and net losses in the high teens last year.
Autobytel.com will offer 4.5 million shares at $16 to $18. Autoweb.com will offer five million shares at $10 to $12 each.
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