01:02 AM ET 05/08/99
IPOs Available on Internet
IPOs Available on Internet
By EILEEN GLANTON=
AP Business Writer=
NEW YORK (AP) _ A few brokerages are turning to the Internet to
find those investors who wouldn't normally buy stock in an initial
public offering.
It's not easy to get a piece of an IPO. The shares are usually
off-limits because brokerages sock them away for their wealthiest
clients and large institutional investors. Not anymore.
William Hambrecht, one of the pioneers in the field, said his
company's Web-based system helps ensure that ''a bid from an
individual has the same standing as a bid from the largest
institutional investor in the world.''
W.R. Hambrecht & Co. solicits offers over the Internet and
awards shares to the highest bidders. Donaldson, Lufkin & Jenrette
allocates some of the IPOs it is sponsoring to its online
customers. And several companies offer portions of other
brokerages' IPOs to their online clients.
That's how Suresh Reginald, an investor in Malden, Mass., has
made $15,000, by his own estimate, from newly issued stocks. He
checks a list of upcoming IPOs every couple of days with brokerage
Charles Schwab, and when a company strikes his fancy, puts in a
request with a Schwab representative.
Since January, he estimates he's gotten in on at least 60
percent of the deals he's requested. ''For non-Internet IPOs, I get
in 100 percent of the times I request them,'' he said, calling the
offerings ''a gold mine.''
In recent months, it's been hard to miss the big first-day
payoffs of initial public offerings, especially for any company
with a ''dot com'' in its name. In January, the business news Web
site MarketWatch.com was offered as an IPO for $17. At the end of
its first day of trading, investors were paying $97.50 _ a stunning
474 percent gain.
High-tech issues aren't the only market darlings. This past
week, investment bank Goldman Sachs sold 69 million shares at $53 a
piece, raising $3.66 billion. In the days leading up to Goldman's
market debut, clients placed orders for an incredible 800 million
shares.
So who got the 69 million that were available? Goldman won't
specify, but estimates are that 70 percent of the shares went to
institutions like pension funds. The remainder went to rich
individuals.
''The majority of owners of this deal were either insiders or
Goldman's best clients,'' said Charles White, portfolio manager at
the brokerage Avatar Associates. ''It's a wonderful kiss for those
people who wound up getting stock in the deal.''
Even so, many IPO payoffs are modest. And the coveted Internet
stocks can be highly volatile.
''This is high-risk gambling,'' said Gail Bronson, a Palo Alto,
Calif.-based analyst for IPO Monitor.com. ''No one knows when the
roulette wheel is going to come to a screeching halt.'' |
