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To: Tod Skinner who wrote (93)	8/6/1998 5:38:00 PM
From: RealMuLan	Read Replies (3) \| Respond to of 316

INTERVIEW-S&P sees end to rocketing Internet IPOs Thursday August 6, 4:30 pm Eastern Time By Holly Rosenkrantz NEW YORK, Aug 6 (Reuters) - Seeing an end to the days when new Internet stocks prices reached dizzy heights after going public, Standard & Poor's has decided to be tougher when it evaluates internet-related initial public offerings. In an interview, S&P investment officer Mark Basham said the ratings agency decided would be more selective when recommending a new Internet stock, emphasizing the importance of company fundamentals. ''The Internet offering cycle has peaked,'' Basham said. ''Returns from these companies will drop going forward.'' S&P decided this week to stop issuing blanket ''short-term buy'' recommendations on all Internet IPOs in light of choppier market conditions, as well as a surprisingly quick drop in the price of the latest Internet company to go public, Cyberian Outpost (COOL - news). Cyberian, an online retailer of computer and software, rose 8 points after going public Friday, but by Monday the stock was below its $18 a share IPO price. It closed Thursday at 17-5/8. And while it has become common in this weak IPO market for new stocks to dip below their offering price soon after their debuts, Internet deals have been immune from trend. Just two weeks before the Cyberian deal, another Internet company, Broadcast.com (BCST - news), soared a stunning 56 points after its $18 a share IPO, posting the largest first-day gain ever on Wall Street. The stock was trading Thursday at about $55 a share. Other recent Internet-related deals, such as Software.net (SWNT - news) and Inktomi Corp. (INKT - news), have doubled in value after going public and are still trading above their IPO prices. ''Cyberian did fine, they made their money,'' Basham said, pointing out that demand for the IPO was strong enough to lead its underwriter, BT Alex. Brown, to raise the price of the offering shortly before the deal. The stock was originally expected to sell at a $13-$15 price range. ''We just think Cyberian shows that these investments are very, very short-term,'' Basham said. In the past, S&P recommended all Internet-offerings as a buy, since excitement over stocks like Yahoo and Amazon.com Inc. (AMZN - news) was strong enough to make these deals money makers, at least for the short-term. But with increasing market choppiness, S&P anticipates that investors will become more selective in chasing Internet deals, Basham said. Now, S&P will only recommend Internet-offerings if the company is making money, or ''is close to it,'' Basham said. Companies also have to illustrate strong barriers to entry in their particular niche of the Internet business, he said. And while the schedule of upcoming IPOs has slimmed down this week in light of the broader market's correction, there are still plenty of Internet deals in the pipeline to test whether or not investors will indeed change their standards. At least four Internet companies are tentatively scheduled to go public next week. Highlighting that roster are well- watched deals from Internet companies CitySearch Inc. (CTYS - news) and Geocities (GCTY - news). Basham said he has not yet evaluated these deals.