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Technology Stocks : United Parcel Service Inc-(UPS) -- Ignore unavailable to you. Want to Upgrade?

To: brian h who wrote (159)	11/11/1999 5:38:00 PM
From: Patriarch	Read Replies (1) \| Respond to of 368

UPS Shares Rise 9.1% on 2nd Day After Record U.S. IPO By Rip Watson Atlanta, Nov. 11 (Bloomberg) -- United Parcel Service Inc. shares rose 9.1 percent, gaining for a second day after the world's biggest package delivery company raised $5.47 billion in the largest U.S. initial stock sale. UPS rose 6 1/8 to 73 1/2 on the New York Stock Exchange after earlier touching 76 5/8. Some 28.3 million shares traded on U.S. exchanges, making it the fifth most-active stock. The Atlanta-based company's shares rose 35 percent yesterday, the first trading day after UPS sold 109.4 million Class B shares at $50 each, a 9 percent stake. Some 81 million shares traded yesterday as investors sought a piece of a large, profitable company with nine decades of history behind it. ``It was a wildly successful offering -- far more successful than I would have anticipated,' said Richard Begun, who helps oversee $1.2 billion at Orbitex Management Inc. and bought UPS shares in the IPO. ``It's the last, greatest blue-chip company around that was still privately held.' Begun cautioned, though, ``it's trading at an extremely lofty valuation, and it remains to be seen if UPS can maintain that valuation.' At a price of $72, UPS would trade at about 50 times its 1998 earnings. Buyback and Expansion UPS will use the money from the sale to buy back some of the Class A voting stock held by 125,000 shareholders, mostly employees and heirs of the founding Casey family. The Class B shares have vote each, while the Class A shares have 10 votes. The buyback keeps the shares outstanding at about 1.2 billion. UPS can use the new public shares to help buy businesses as it competes with FDX Corp.'s Federal Express and postal services. Chairman James Kelly yesterday said some businesses that UPS has approached about acquisitions wanted shares in the company instead of cash. Some analysts expect UPS to expand its technology for business-to-business electronic commerce and to make more international acquisitions. ``There is a technological arms race in the small-package markets,' said Joe Guerrisi, a former UPS executive who is now a director of the Arlington-Virginia based consulting firm MergGlobal Inc. ``It is absolutely critical, especially when e- commerce takes off.' As for international expansion, Guerrisi said UPS might look toward Asia, targeting transportation-coordinating companies called freight forwarders or an airline with attractive operating rights on routes to and from China. ``If there is a weak spot in their worldwide network, it is in Asia,' Guerrisi said. Institutional investors clamored for shares in the initial sale, which was managed by Morgan Stanley Dean Witter & Co. Gil Knight, a money manager who helps over see $11 billion at Alloied Investment Advisors Inc., said he tried to buy 500,000 shares in the IPO and received only 1,000. Even with its size and history, UPS won't be eligible for the benchmark Standard & Poor's 500 Index. That couldn't happen unless at least half its stock becomes publicly traded, said David Blitzer, head of the committee at Standard & Poor's Corp that picks the members of the index.