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Technology Stocks : Buying IPOs on the open market -- Ignore unavailable to you. Want to Upgrade?

To: dk10438 who wrote (5273)	12/28/1999 12:02:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 5529

Stick a fork in the IPO market -- it's done By Gracian Mack Redherring.com December 28, 1999 The once-crowded initial public offering neighborhood has become somewhat of a ghost town for the last two weeks of 1999, as Wall Street appears to have shuttered the doors against any new offerings until after the New Year's holiday. Just last week syndicate officials were promising a heady 15 deals, worth an aggregate $1.85 billion, for the close of 1999. But by the middle of the week, that number had been pared down to two, and now it's down to one. The most recent pushback is the proposed 2.5 million share IPO of Atlas Pipeline Partners, a subsidiary of Resource America (Nasdaq: REXI). Under the direction of Friedman Billings Ramsey (NYSE: FBR), the lead underwriting manager, Atlas will wait until sometime in January to take the public-market plunge. That wait might turn out to be a good idea, because finding investors willing to pony up between $14 and $18 per share for a low-tech gas pipeline outfit might have proved as difficult a task as locating the company's Moon Township, Pennsylvania, headquarters on a gas-station map. ANOTHER LINUX HOPEFUL The other deal, a proposed IPO of LinuxOne (proposed Nasdaq symbol: LINX), hopes to be the next wagon to be hitched to the Linux juggernauts Red Hat (Nasdaq: RHAT), Andover.net (Nasdaq: ANDN), Cobalt Networks (Nasdaq: COBT), and VA Linux (Nasdaq: LNUX). LinuxOne sells a version of the Linux operating system, as well as other Linux-related software tools. The now-famous Red Hat was priced at $14 on August 12. With a recent close of $234 per share, the stock is up 1,574 percent and sports a market capitalization of just over $16 billion. Cobalt Networks was priced on November 11 at $22 per share. With a recent close of $109 per share, the stock is up 395 percent and sports a market capitalization of almost $3 billion. Andover.net was priced on December 9 at $18 per share. With a recent close of $45 per share, the stock is up 152 percent and sports a market capitalization of $361 million. And VA Linux was priced on December 10 at $30 per share. With a recent close of $190.50 per share, the stock is up 535 percent and sports a market capitalization of $7.6 billion. That's stiff competition for market share, and that doesn't count other Linux-related firms such as TurboLinux, Linuxcare.com, SuSe, Caldera Systems, and Linux Mandrake, which even LinuxOne officials admit have more clout in the alternative-to-Windows universe, as well as more of an operating history. Based in Mountain View, California, LinuxOne intends to sell 3 million shares of common stock at $8.25 per share. Originally planned as a do-it-yourself offer, LinuxOne's Chairman and CEO, Wun Chiou, recently brought in Capital West Securities to handle the details. That may help, but it won't change the fact that the company's first commercial product rolled off of the shelves almost at the same time the company filed for the offering in September. So far, LinuxOne has $157 million in losses on no revenue. BETTING ON THE CEO LinuxOne has announced that since the filing date in September, it landed three overseas contracts for its operating system. But with no perceivable funding, the fate of the company rests with Mr. Chiou, who among other things was chief of the artificial intelligence branch of the NASA Ames Research Center for a year in 1984. After the offering Mr. Chiou will have reduced his equity stake in the company to about 40 percent, down from a little more than 60 percent. The syndicate desk at Capital West says that they are trying to get the deal done before the end of the year. If that doesn't happen, LinuxOne will have to refile with the U.S. Securities and Exchange Commission; by the time approval is given several other highly anticipated January offerings will be in progress. Among those are Altavista (proposed Nasdaq symbol: ALTA), Palm Computing, and Buy.com (proposed Nasdaq symbol: BUYC). Last year the IPO market didn't return from holiday break until January 14 with the issue of Marketwatch (Nasdaq: MKTW). For LinuxOne, the plan is to get into the market before 1999 closes its doors for good.