>>WIT CAPITAL GROUP INC(WITC)
Bid: 14 13/16 BidSize: 0 Open: 12 1/2
Ask: 14 7/8 AskSize: 0 Close: 9
Last: 14 7/8 High: 16 9/16 Div.: 0.00
Change: +5 7/8 Low: 12 1/2 Yield: 0.00
A.High: 16.562 P/E: 0.00 Volume: 15730600
A.Low: 12 1/2 <<
I love Bear, Stearns& CS. If you kiss their ass, they sure will reward you.Does anyone out there, know when Buy.com is coming out, and who is the lead under-writer??
New York, June 4 (Bloomberg) -- Wit Capital Group Inc., an investment bank that raises money for companies over the Internet, rose 65 percent on its first trading day, as investors bet on rapid growth at the three-year old company.
The New York-based firm's stock rose 5 7/8 to 14 7/8. About 15.7 million shares changed hands on the Nasdaq Stock Market. The company closed with a market value of $1.07 billion.
Wit Capital sells shares in initial offerings over the Internet to individual investors, who are ignored by most investment banks. The company helped sell shares in 80 public stock sales by mid-May; 62 were IPOs including MarketWatch.com Inc., Prodigy Communications Corp. and iVillage Inc.
''You have to look at its (upward) trajectory,'' said Randall Roth, an analyst with Renaissance Capital Corp. in Greenwich, Connecticut. Wit is participating in more IPOs and receiving more shares to sell, he said.
For 19 of the stock sales, Wit served as ''e-manager,'' which got it a mention on the front cover of the prospectus that outlines the business plans of the company offering its shares. As e-manager, Wit distributes 1 percent to 5 percent of the shares. For other IPOs its percentage may be smaller.
The company had 41,000 customers at the end of April, up from 3,100 little more than a year ago.
Wit Capital sold a total of 8.7 million shares at $9 each, raising $78.7 million. It sold 7.6 million shares yesterday at the initial sale, and an additional 1.1 million shares today when its underwriters, who include Wit, exercised their option to do so at the same price. The sale represented a 12 percent stake.
Losing Money
Like many Internet start-ups, the company faces concerns over how it will make money. Since 1996, when Wit Capital first hired bankers, the company has yet to manage a stock sale. And Wit earned little from all the deals in which it participated.
The company has until recently ''received none or negligible portions of the management fees usually paid to co-managing underwriters,'' it said in its IPO filing with the U.S. Securities and Exchange Commission. As a newcomer to the IPO business, Wit has little bargaining power to demand more fees.
Wit lost $4.9 million on revenue of $3.9 million for the quarter ended March 31. The company lost $8.8 million last year.
''Wit definitely has to diversify its revenue sources to ensure that they don't live or die by the IPO market,'' said Bill Burnham, an analyst with Credit Suisse First Boston Corp.
Wit faces increasing competition from other recently established online banking firms.
E*Trade Group Inc., the second-largest online broker, has formed E*Offering with Sanford Robertson, one of the founders of Robertson, Stephens & Co. Also, W.R. Hambrecht & Co., founded by another major West coast banker, Bill Hambrecht, is offering IPOs through an online auction.
Friedman, Billings, Ramsey Group Inc. launched online bank fbr.com in mid-April, through which it too is offering IPOs over the Web.
''We have 10 years of content and the infrastructure to deliver high-quality IPOs, and control the allocation process,'' said Russell Ramsey, president of FBR, which is based in Arlington, Virginia.
FBR will be able to offer much larger IPO allocations than Wit because FBR has the resources to serve as the main bank handling an IPO. FBR was the sixth-largest IPO underwriter by capital raised in 1997 and 1998, he said.
Wit has hired senior bankers from some of the best-known Wall Street firms as it tries to play a more prominent role.
One of Wit's co-chief executives, Robert Lessin, 44, was previously a vice chairman at Salomon Smith Barney Inc. The other, Ronald Readmond, 56, was vice chairman at Charles Schwab & Co.
Hiring Bankers
Mark Loehr, 42, director of investment banking, was head of equity capital markets at Salomon Smith Barney. Johathan Cohen, 34, director of research, was at Merrill Lynch & Co. as its Internet analyst. Andrew Klein, 39, a former securities lawyer, founded Wit in April, 1996.
These are ''guys who are really seasoned professionals in the business,'' said Michael LeConey, an analyst with Security Capital Trading Corp.
In April, Goldman Sachs Group L.P. bought a stake in Wit Capital equal to 16.7 percent of its shares following the IPO, with warrants that could bring the total to 24.7 percent. The investment was one of several Goldman has made in finance-related Internet businesses.
The relationship will give Wit increased stature in the investment banking community and with corporate clients, the company said. What it hasn't done is bring Wit a greater allocation of shares in Goldman-led IPOs.
Wit received about 4 percent, 1 percent and 2 percent, respectively, of the shares in Barnesandnoble.com Inc, StarMedia Network Inc., and EToys Inc., each a recent Goldman deal. Wit received the biggest proportion of shares in the Goldman IPO that has so far fared the worst, Barnesandnoble.com, and the smallest proportion in the IPO that fared the best, StarMedia Network.
Wit Capital trades under the symbol ''WITC'' on the Nasdaq Stock Market. Bear, Stearns & Co. and Wit Capital handled the sale, with assistance from Thomas Weisel Partners LLC.
Jun/04/ 99 18:00
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