More ipo news :
"Palm eyes $424 million, IPO 724 Solutions, ST Assembly heat up"
By Steve Gelsi, CBS MarketWatch
Last Update: 5:06 PM ET Jan 28, 2000
Net Stocks
NEW YORK (CBS.MW) -- Palm said Friday it's eyeing big proceeds of
$424 million from its upcoming initial public offering as the hand-held
computer firm set tentative terms for its eagerly awaited stock debut.
Palm (PALM: news, msgs) said it'll sell about 26.5 million shares at an
estimated price of $16 each in a bid to raise $424 million with lead
underwriter Goldman Sachs.
The estimate more than quadruples the $100 million the company said it
planned to raise when it filed on Dec. 13. The estimated price level was
contained in a filing with the Securities and Exchange Commission.
Shares of 3Com (COMS: news, msgs), which
owns Palm, were unchanged at 46 1/2 on the
Island ECN in after-hours trading Friday.
The IPO is expected to debut on Feb. 28,
according to a spokeswoman in the Goldman
Sachs press office.
With the rise of wireless stocks in recent months
such as Qualcom (QCOM: news, msgs) and the strong debut of newer
stocks such as Friday's wireless software specialist 724 Solutions, Palm is
considered one of the hottest IPOs of the year.
It's a profitable company with a market-leading share of the hand-held
computer market, analyst point out.
David Menlow of IPOFinancial.com gave the stock his hottest rating.
"There is almost nothing in this offering that makes it look bad," Menlow
said in a recent research note. "Everywhere you move in this deal, you
step in quality."
As of Dec. 31, Palm has sold more than 5.5 million hand-held devices
worldwide; and more than 33,000 third-party developers had registered
to create applications based on the Palm platform.
Revenue increased to $564 million in 1999, from about $1 million in
1995.
Techs soar; traditionals sag
Investors in the market for initial public offerings held on to a pattern of
embracing Internet and technology issues and shunning traditional players
on Friday.
The schizophrenic attitude was illustrated by the high price for 724
Solutions and the lax reception afforded Packaging Corp. of America,
two of eight news issues sharing the spotlight Friday.
The Net and tech players stoked investor interest by fetching higher
prices, while more-traditional operations sagged in a virtual replay of the
fisticuffs between old-liner John Hancock (JHF: news, msgs) and onliner
Extensity on Thursday (EXTN: news, msgs).
Hancock declined 5/8 to 17 on its second day of trades Friday. Extensity
fell 3 1/4 to 68 after a gain of 256 percent on its opening day.
Hottest deal
724 Solutions (SVNX: news, msgs) closed at 71 13/16, a 176 percent
jump from its $26 price. The stock opened at 73 and generated volume of
about 7 million shares.
The IPO priced a big $4 above its upped range of $20 to $24. Its lead
underwriter is CS First Boston. The IPO pricing level has more than
doubled since an initial range of $11 to $13 per share was penciled in.
Toronto-based 724 Solutions licenses software to financial companies,
enabling them to offer services through hand-held devices such as the
3Com Palm Pilot.
"While the company is young and it has yet to commercially launch its
product, the opportunity is huge and the group is red-hot," Renaissance
Capital stated in its weekly IPO note.
Meanwhile, competitor W-Trade Inc. of New York kept a close eye on
the IPO. "We're studying both paths: staying private or doing an IPO,"
said W-Trade Chief Executive Donna Oliva. The company has funding
from Merrill Lynch, Paine Webber and Deutsche Telecom.
W-Trade launched its transactional platform for wireless devices in
February 1998. It started out with wireless banking and stock trading but
is planning to add new functions as soon as Monday.
"The market's reached a flashpoint where consumer acceptance with what
we're doing and what 724 Solutions is doing is taking off," Oliva said.
Although an IPO is an option, W-Trade is more focused on "taking our
market leadership position and keeping it, and not being influenced by the
lure of going public," Oliva said
ST Assembly Test
Singapore-based ST Assembly Test Services
(STTSV: news, msgs) closed at 41 1/4, a 96
percent gain over its $21 offering price.
The stock opened at 39 9/16 and picked up steam
on volume of 9.3 million..
The $396 million, 15.3 million-share IPO was
priced a dollar above its upped $18-to-$20 range
as institutional investors piled on.
The independent provider of semiconductor test
and assembly services is backed by lead
underwriter Salomon Smith Barney.
It's the biggest deal of the day in terms of the
amount of money raised.
Caminus
Caminus (CAMZ: news, msgs) closed at 19 1/4, a
20 percent gain over is $16 price. The stock
opened at 18 and climbed on volume of 5.6 million.
The company's 4.3 million-share IPO priced a dollar above its
$13-to-$15 range in a sign of strength. The New York-based software
supplier for the energy industry is backed by lead underwriter Deutsche
Banc Alex. Brown.
L90 premium
L90 (LNTY: news, msgs) closed at 23 9/16, a premium of 57 percent
over its $15 offering price.
The company priced its 6.5 million-share IPO above its planned
$12-to-$14 range.
The Santa Monica, Calif., provider of online advertising and direct
marketing for advertisers and Web publishers worked with lead
underwriter SG Cowen.
Aspect Medical
Natick, Mass.-based Aspect Medical Systems (ASPM: news, msgs)
closed at 28 1/4, a premium of 88 percent over its $15 price. The stock
opened at 21 9/16 and hit volume of 4.5 million.
Aspect priced its 3.5 million shares at the top of its $13-to-$15 range, in
an IPO led by Morgan Stanley Dean Witter. The company makes
anesthesia-monitoring systems for the health-care industry.
Cool
Lake Forest, Ill.-based Packaging Corp. (PKG: news, msgs) held steady
at 12, its offering price, as the 46.3 million-share IPO kicked off. With
volume of 11.1 million shares, it was the most heavily traded IPO of the
day.
Although it's a profitable company with a big-shot underwriter, Goldman
Sachs, Packaging Corp. failed to drum up much interest.
It priced at the bottom of its $12-to-$15 range after trimming its range
from $16 to $19 as investors shied away ahead of the deal.
Atlas shrugs
Moon Township, Pa.-based Atlas Pipeline (APL: news, msgs) fell below
its offering price on its opening day.
The stock debuted at 12 3/4, under the $13 offering price for the 1.5
million share IPO. Shares closed a notch lower at 12 3/8.
It priced at the bottom of its $13-to-$15 price range. Its IPO is being led
by Friedman Billings Ramsey.
Natgo
Houston-based Natgo Group (NTG: news, msgs) closed at 10 15/16,
rising slightly over the $10 price for the 7.5 million-share offering.
Natgo priced at the bottom of its $10-to-$12 range in an IPO led by
Donaldson, Lufkin & Jenrette. The company sells well-head equipment,
systems and services used in the production of oil and gas.
Corillian IPO
Beaverton, Ore.-based Corillian (CORE: news, msgs) filed to raise $69
million with lead underwriter CS First Boston.
The company sells Internet software and services aimed at banks,
brokers, financial portals and other financial service providers. Its
products allow consumers to conduct financial transactions, view personal
and market financial information, pay bills and tap into other financial
services. Investors include Battery Ventures, BCI Partners and First
Union Capital.
Arrowpoint aims IPO
Acton, Mass.-based Arrowpoint Communications (ARPT: news, msgs)
filed for an $86.3 million initial public offering with lead underwriter
Goldman Sachs.
The company rang up revenue of $12.4 million and a loss of $12.6 million
in 1999, up from $201,000 in revenue and a loss of $9.5 million in 1998.
Arrowpoint sells Web switches aimed at the markets for e-commerce
transactions and Web content delivery.
North Bridge Venture Partners owns 19.1 percent and Matrix Partners
owns 26.3 percent.
Web switches, along with other Internet infrastructure, have earned a
warm spot in the hearts of IPO investors. Foundry Networks (FDRY:
news, msgs), a Web switch specialist, debuted on Sept. 28 at $25 per
share and is now trading at about 125 after a 2-for-1 stock split.
Crown Media files
Englewood, Colo.-based Crown Media Holdings (CRWN: news, msgs)
filed for a $288 million initial public offering with lead underwriter
Donaldson, Lufkin & Jenrette.
The company operates pay TV channels offering family programming with
more than 50 million subscribers worldwide.
Shareholders include Hallmark Entertainment, Liberty Media (LMG.A:
news, msgs), the National Interfaith Cable Coalition and Chase Equity
Associates.
Steady Hancock
Boston-based John Hancock (JHF: news, msgs), a 137-year-old
company and well-known brand name, in its debut Thursday rose only
slightly over the offering price of $17 in its $1.7 billion initial public
offering.
"Hey, we're not a
'.com' stock, but we're
doing fine," said
Hancock Chief
Executive Stephen
Brown.
Shares of Hancock
closed their opening
day at 17 5/8, slightly
below their open of 17 3/4. A hefty 33.1 million shares changed hands. It
was the most heavily traded stock on the New York Stock Exchange.
See broadband interview with Hancock's CEO.
Extensity
By contrast, Extensity (EXTN: news, msgs) was received with great
enthusiasm and became the second Internet IPO of the year to at least
double its offering price on its opening day after Neoforma (NEOF: news,
msgs) performed that trick on Jan. 24.
Steve Gelsi is a reporter for CBS MarketWatch.
cbs.marketwatch.com
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