MTEX<---------- BLOOMBERG STORY!!!! Stock is toast!!
(Adds closing stock price, comments by David Menlow in 3rd
paragraph, Tom Newell in 9th and 12th paragraphs, background.)
Coppell, Texas, Feb. 17 (Bloomberg) -- Mannatech Inc, a
Coppell, Texas-based company that uses a sales force of 226,000
to market nutritional supplements, had a volatile day second day
of trading with shares plunging 50 percent only to rise, ending
the day 41 percent higher.
Shares rose 9 1/4 to 31 3/4, after hitting a high of 44 1/2
and dropping to a low of 22 1/8 earlier in the day. About 1.9
million shares changed hands on the Nasdaq Stock Market.
Non-Internet IPOs like Mannatech ''that have stratospheric
price moves over short periods of time are not prone to having
the air let out of the balloon but having the balloon pop,'' said
David Menlow, president of IPO Financial Network, a research firm
in Millburn, New Jersey, that rates IPOs.
Mannatech filed in March 1998 with the U.S. Securities and
Exchange Commission to sell shares but delayed the sale to review
its strategy for selling shares. In September, Mannatech scrapped
a plan to use Adams, Harness & Hill Inc as an underwriter, opting
to sell shares itself.
The company and existing shareholders sold 3.1 million
shares, or about 13 percent of the total outstanding, on a ''best
efforts'' basis through subscription agreements. Stock, initially
priced at $8 each, yesterday rose to 22 1/2.
Mannatech marketed its shares to its network of commission-
based sales staff -- that is nearly as large as General Motor's
national workforce -- and to other investors. J.B Hilliard, W.L.
Lyons Inc., a Louisville, Kentucky-based investment bank, served
as placement agent, handling subscriptions and payments for the
shares.
Charles Fioretti, 52, a co-founder of the company and its
chief executive, had a stake worth at least $183.5 million by
today's close. Samuel L. Caster, 48, also a co-founder and the
company's president, had a stake worth at least $175.6 million.
Fioretti served as owner and operator of several Outback
Steakhouse Inc. restaurants in Arizona, Indiana and Kentucky from
June, 1990 until April, 1995. Caster served as co-founder and
president of a company that sold ''alternative'' candy bars for
children from April 1992 until August 1993, and as a consultant
for a company that sold metabolic vitamins from January 1990
until April 1992.
''We have a good company with good products and that has
gotten us to where we are today along with a lot of support from
some very dedicated associates whom we are lucky enough to have
working with us,'' said Tom Newell, the company's director of
investor relations.
Mannatech's supplements are based on an ingredient called
Ambrotose Complex, which supports ''optimal cell-to-cell
communication,'' according to the company's SEC filing.
The company earned $8.6 million for the nine months ended
Sept. 30 on sales of $122.9 million, compared with $8.9 million
on sales of $111.1 million in the same period a year ago.
Mannatech sold 1.5 million of the shares, raising $12
million before expenses. The company will ''use the money to fund
our future international expansion as well as our working capital
needs,'' Newell said.
The initial price of $8 was ''arbitrarily determined,''
according to the company's SEC filing. Mannatech's board of
directors considered the company's earnings, prospects, and the
earnings of comparable publicly traded nutritional supplement
companies in arriving at the initial price, the company said.
At today's close, Mannatech had a market value of about
$749.3 million.
Mannatech trades under the symbol ''MTEX.''
--Per H. Jebsen in the New York newsroom (212) 893-3368/jh/mr
Story illustration: For a graph of the recent performance of
Bloomberg's IPO Index, enter BIPO <Equity> GP.
Company news:
MTEX US <Equity> Mannatech
Industry news:
NI FOD Food
NI HEA Healthcare
Regional news:
NI TX Texas
NI US U.S.
News by category:
NI INI IPOs
NI COS Company news
NI NEWSTK New stock
People in the news:
For news about any of the people mentioned in this story, type
WHO followed by the person's name and <Go>.
For more news on IPOs by food companies, type TNI FOD INI.
-0- (BN ) Feb/17/ 99 18:22
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