* This Week's IPOs *
Priceline.com (PCLN)
ZDNet (ZDZ
Critical Path (CPTH) on Monday
Claimsnet.com (CLAI)
MKS Instruments (MKSI)
Pepsi Bottling Group (PBG)
* Next Week's IPOs *
Gen Y online community and dELiA*s spinoff iTurf (TURF)
online retailer Value America (VUSA)
ISP Log On America (LOA)
Internet strategy consultant iXL Enterprises (IIXL)
USinternetworking (USIX)
Hi-speed DSL-based Internet provider Rhythms NetConnections (RTHM) d California wine maker Ravenswood Winery (RVWD)by way of a Dutch auction - the first of its kind.
* Recent IPO Filings *
E-Loan (EELN), an online destination that matches borrowers and lenders,
ISP CRL Network Services (CRLX),
e-commerce solutions provider Private Business (PBIZ)
CareInsite (no ticker), a company developing an online healthcare network.
Mexican eatery Rubio's Restaurants (RUBO)
retail mortgage provider Prism Financial (PRFN).
Another week, another crop of hot Internet IPOs. Leading the way last week was MiningCo.com (MINE), which operates a network of 600 topic specific Internet sites. MiningCo priced Tuesday night at $25, an incredible 79% above the top of its initial range of $12 to $14, and started trading Wednesday at more than $55 per share. The stock finished the week at $58 3/4, up 135%. Competing auto web sites Autoweb.com (AWEB) and Autobytel.com (ABTL) also had big debuts gaining 134% and 75% respectively after pricing above their initial ranges. And Internet service providers continued to shine as ISP roll-up OneMain.com (ONEM) priced above its initial range at $22 per share and finished the week at $32 with a gain of 45%. One Internet deal slated to price last week actually did not make it to market, but it was not for lack of demand. E-mail service host Critical Path (CPTH) initially filed to sell shares within a range of $9-$11. Thursday, that range was raised to $18-$20 and on Friday, the range was raised again to $22-$24. After a delay with the SEC, Critical Path will start trading on Monday. Even companies that are just tangentially related to the Internet have seen strong interest. CD and video distributor Valley Media (VMIX), which derived 18% of its sales from online retailers last year, priced $2 above its range at $16 Thursday and closed Friday at $20 1/8, up 26%.
To some extent, it can be argued that recent flood of online companies coming to market has lowered returns on individual Internet deals. For example, excluding last week's deals, 18 Internet companies have come to market in 1999 posting an average gain of 209%. On the other hand, last week's Internet deals posted a relatively lackluster average gain of 97%. However, underwriters are now pricing Internet deals more aggressively than they did at the beginning of the year. In addition, underwriters typically focus on their strongest deals at the beginning of the year so many of the Internet deals seen early in '99 were the cream of the crop. In any event, an average gain of 97% is still remarkable and the Internet sector is still the hottest area in the IPO market. The real casualties of Internet mania have been deals outside of the Internet space. With more and more Internet deals to track, investors have simply lost interest in everything else.
Last week, two more companies from outside the Internet had rocky debuts. Italian motorcycle manufacturer Ducati Motors (DMH) priced early in the week in Italy and started trading on the New York Stock Exchange on Thursday. Ducati priced in the middle of its proposed range at $31.67, but broke below its offer price almost immediately. Ducati ended the week at $28.50, down -10%. Israeli private label apparel manufacturer Delta Galil (DELT) also struggled early on. Delta Galil priced at $9 per share Wednesday night, $0.50 below its initial range, and finished the week flat. Year to date, 26 companies from outside the Internet arena have come to market and the average gain is a paltry +2.7%. If you exclude IT services company Perot Systems (PER), which rocketed in early trading and is still up 96% from its offer price, the average return is actually a loss of -1%. Even more telling is the fact that half of the non-Internet deals from 1999 are currently at or below their offer prices. The list includes such big names as Gabelli Asset Management (GBL), Boyds Collectibles (FOB), Del Monte Foods (DLM) and Korn Ferry International (KFY). Given the number of Internet deals scheduled over the next few weeks, things should get worse before they get better for non-Internet deals. But for the long-term, value investor, there are certainly some attractive investment candidates among recent new issues outside the Internet space.
This week, Internet deals make up a smaller percentage of the calendar than the past few weeks. But there is no question that the Internet deals on the calendar will generate the most investor enthusiasm. Three names that should generate tremendous interest are name your price web auctioneer Priceline.com (PCLN), Ziff Davis' tracking stock of its online division, ZDNet (ZDZ), and Critical Path. One name from outside the Internet space that could also generate interest is Pepsi spinoff, Pepsi Bottling Group (PBG).
The level of activity among companies filing to go public slowed somewhat last week. Just 6 companies entered the pipeline. Not surprisingly, most were Internet related. Last week's Internet filers included E-Loan (EELN), which connects lenders and borrowers online, Inernet service provider CRL Networks (CRLX) and Private Business (PBIZ), which provides e-commerce software solutions to community banks. |
