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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (54562)	8/3/1999 7:09:00 PM
From: Lucretius	Respond to of 86076

turn out the lights... the party is over.... FOCUS-1-800-Flowers.com sparks fear of IPO doldrum TUESDAY, AUGUST 03, 1999 6:37 PM - Reuters (adds executive and analyst comments, stock update, byline) By Denise Duclaux NEW YORK, Aug 3 (Reuters) - Shares of 1-800-Flowers.com Inc. (NASDAQ:FLWS) drooped below their offering price after their market debut on Tuesday in a sign investors may have wearied of the initial public offering frenzy that had swept the Street. The more than 13 percent drop from the stock's $21 offering price had made 1-800-Flowers.com's top executive at least a touch nostalgic for a market that had snatched up new issues and pushed them to astronomical valuations. "At first I questioned, 'Gee, should we have done this six months ago?' But I have been at this for over 20 years and we are hardly sprinters, we're marathoners," Chairman and Chief Executive Officer Jim McCann told Reuters, confidant investors will discover the stock's long-term value. Shares of the the Westbury, N.Y.-based flower and gift retailer slid $2.81 from its initial price of $21 to close at $18.19 on the Nasdaq. The company, which sells through a Web site, toll-free number and retail stores, offered 6 million shares in a deal underwritten by heavyweight Goldman Sachs. 1-800-Flowers.com raised $126 million through its offering. The firm sold a roughly 10 percent stake through the deal, which priced at the top of an increased price range. "I would guess we picked a day that is a tough day for the Internet sector to come to the market place," McCann said. "I think you'll see that with the quality of the company and the quality of its partners from a syndication point of view...I think we will hold our own in a very, very tough market." He joined industry watchers in speculating that the market's zest for Internet-related new issues may be waning. Just last week, Web telephony provider Net2Phone Inc. (NASDAQ:NTOP) rocketed 36 percent following its $15-per-share offering. "I think it will be a lot tougher for companies that don't have the strength..don't have the profitable operating history that we have to come to market in such a tight, tough questioning market; for the whole sector, but especially for Internet-concentrated companies like our own," McCann said. Analysts had expected 1-800-Flowers.com, which touts relationships with America Online Inc. (NYSE:AOL) and Microsoft Network (NASDAQ:MSFT), to blossom on its first day of trading. "It didn't live up to the Street's expectations. I think the double premiums out of the gate will not be seen for quite some time now," said Vincent Slavin, an analyst at Cantor Fitzgerald. Some experts believe the stock may have sagged simply because the company, which generates roughly 15 percent of its orders over the Web, is not an Internet pure-play. "Basically it is a '.com' business plan versus a a real true '.com' company going public. It's not on the growth path for Internet companies," said William Smith, president of Renaissance Capital Corp.'s IPO Plus Aftermarket Fund (NASDAQ:IPOSX), noting the firm's year-over-year growth did not match Internet firms producing 100 percent or more growth. But 1-800-Flowers.com's reception has led many analysts to fear the IPO mania of late may be coming to a halt. "There is something else going on in the marketplace and people may be getting tired of the IPO market," said David Menlow of IPO Financial Network in Millburn, N.J. "This could start us off on the summer doldrums." Experts predict that the share price of 1-800-Flowers.com, which boasted sales of more than $203 million for the nine months ended March 28, would recoup. "I think the company is in a great position," said Ken Cassar, an analyst at Jupiter Communications, adding that the online gift market should grow to $1.4 billion in sales by 2002 from $300 million.