TheStreet.com Shows Net IPOs Are Still Hot
(05/11/99, 8:17 p.m. ET)
By Mary Mosquera, TechWeb
Financial site TheStreet.com fulfilled market anticipation Tuesday with a red hot Nasdaq debut.
Shares of TheStreet.com closed at $60 per share, gaining 216 percent, and fueling the sentiment that Internet IPOs were still hot. However, investors question whether Internet IPOs are ready to burn out. Recent Internet IPOs have experienced less investor exuberance than those in the beginning of the year. And many Internet stocks lose steam after the initial offering.
The subscription-based financial information site, co-founded by money manager Jim Cramer, offered 5.5 million shares, garnering $330 million. The stock was priced Monday at $19 to raise $104.5 million. TheStreet.com, which reported a net loss of $16.3 million in 1998, trades under the ticker symbol "TSCM."
More than 30 .com companies have gone public so far this year, about three times that of the same time last year, and there are still about 80 Internet companies in the pipeline to introduce their stock. Investors may become more discriminating with the large supply, and perhaps quality, of Internet stocks, said online analyst site Briefing.com.
The demand is still tremendous for Internet stocks, in part because there is not a lot of market capitalization held publicly; most of it is still in the hands of founders and insiders, said Bill Whyman, Internet analyst for Legg Mason Precursor Group in Washington, D.C.
Valuations of Net stocks have appeared to be irrelevant as long as the demand outpaced the supply. But that may be changing with the number of new offerings, in addition to stock splits of other popular cyberstocks, Briefing.com said.
Demand for strong Internet stocks will continue to be high. "But just putting .com at the end of a name will no longer, if it ever did, assure an IPO success," Whyman said. Content, brand, and customer traffic are the Internet fundamentals, he added. |
