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To: Tom Kearney who wrote (10841)	7/19/1998 6:48:00 PM
From: Glenn D. Rudolph	Read Replies (3) \| Respond to of 164684

How much advertising does the market really believe is out there? July 17, 1998 Broadcast.com Soars Nearly 250%, Setting a Record for an IPO Debut An INTERACTIVE JOURNAL News Roundup Broadcast.com Inc. became the most successful initial public offering ever, rising nearly 250% in its first day of trading. Shares of the Dallas company, which offers audio and video programming on the Internet, opened Friday on the Nasdaq Stock Market at $68 a share, after being priced at just $18. The stock climbed as high as $74 before slipping a bit to close at $62.75, up 248.6% for the day. With the tremendous advance, Broadcast.com supplants Secure Computing Corp. as the IPO with the best first day performance. Secure Computing, which makes products to keep hackers out of computer networks, went public in November 1995 at $16 and closed its first day at $48.25. On Friday, Secure Computing closed at $9.50, down 12.5 cents. Broadcast.com's offering was expected to get a warm reception on Wall Street, but the record gain blew away many market watchers. "I expected a strong demand, but this surprised me," says Ryan Jacob, manager of the Internet Fund, a New York mutual fund that focuses on IPOs. Demand for the shares among institutional investors prior to when the stock priced late Thursday was such that the company was able to raise the IPO price from an originally expected level of between $11 to $13. Few investors manage to get new issues at their IPO price. Brokers reserve their portion of hot deals for biggest and best customers. The upwardly revised IPO price marked just the second time this month that a new issue managed to come to market above levels that were initially expected. The deal was led by Morgan Stanley Dean Witter. Other underwriters included Donaldson Lufkin & Jenrette Securities Corp. and Hambrecht & Quist. Broadcast sold 2.5 million shares, which represents a 15% stake. With 16.9 million shares outstanding after the sale, the company had a market capitalization of $1.06 billion at the closing stock price. Four of the five most successful recent offerings have emerged from the Internet sector, including Inktomi Corp., NetGravity Inc. and Microstrategy Inc., all of which are trading at phenomenal premiums of 150% or more. And the 10 pure Internet deals that have gone public this year are trading at an average premium of 110%, according to IPO Monitor.com in Los Angeles. "Obviously, on the surface it looks nuts," said Irv DeGraw, an independent IPO analyst in Sarasota, Fla. "But it begins to make sense if you compare it to the early days of television. What we're seeing is an absolute convergence of entertainment, communication and technology," he said. The company, formerly known as AudioNet, is an aggregator and broadcaster of media programming. It has the capability to "stream" or deliver hundreds of live and on-demand audio and video programs over the Internet, including games, the content of more than 345 radio stations, 17 TV stations and cable networks and coverage of more than 350 college and professional sports teams. Most programming is licensed under exclusive, multiyear contracts. Broadcast also provides business services, including Internet distribution of news conferences, seminars and stockholder meetings. Broadcast said about 400,000 people visit its Web site daily. The company's revenue comes from advertising on its Web site (www.broadcast.com) as well as the sale of radio and TV advertising spots it receives in exchange for providing Internet transmission to broadcasters. Broadcast reported a loss of $6.47 million on revenue of $6.86 million in 1997 and a loss of $2.72 million on sales of $3.18 million in the first quarter of this year. Return to top of page \| Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.