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Pastimes : James Cramer Skeptic Thread -- Ignore unavailable to you. Want to Upgrade?

To: mr.mark who wrote (1192)	4/2/1999 6:31:00 PM
From: BomboochaBoy	Read Replies (1) \| Respond to of 1254

TheStreet.com Says IPO to Include 5.5 Mln Shares (Update1) news.com Bloomberg News April 2, 1999, 10:59 a.m. PT TheStreet.com Says IPO to Include 5.5 Mln Shares (Update1) (Update adds information from SEC filing and background information) Washington, April 2 (Bloomberg) -- TheStreet.com Inc., the Internet financial site co-founded by hedge fund manager James Cramer, disclosed the company plans to sell 5.5 million common shares for $11 to $13 in its initial public offering. The online publisher of financial news first filed for the IPO in February, stating it would seek to raise as much as $75 million. TheStreet.com amended that filing today with more precise estimates on the expected proceeds from the sale. At $13 a share, sale of 5.5 million shares would raise about $71.5 million before expenses and the New York-based company would have an initial market value of $326 million, according to documents filed with the U.S. Securities and Exchange Commission. That would be for a company that has yet to turn a profit or reach the $5 million mark for annual revenue. Investors, though, repeatedly have shown they are willing to pay a premium for shares of companies that provide information on the Internet. That may be especially true for a purveyor of financial information to the growing army of people who have forsaken their brokers to trade online. ''There is going to be greater involvement in the stock market by the average person,'' said Jim Balderston, an industry analyst at Redwood City, California, Zona Research Inc., an Internet-specific market research firm. ''Those people are going to need information -- research, tips, commentary -- just as any consumer who will be purchasing things themselves needs information.'' MarketWatch Soared A possible model may be MarketWatch.com Inc., a competing online provider of financial news and data that held an initial offering of 2.75 million common shares at $17 each in January. The shares soared as high as 130 on Jan. 15, the first day of trading, and closed yesterday at 73 1/2, providing MarketWatch.com with a market capitalization of almost $864 million. TheStreet.com and MarketWatch.com each have about 50 journalists who write and edit articles on the markets, companies and other financial topics. MarketWatch.com had revenue of about $7.0 million last year compared to $4.6 million at the TheStreet.com. Losses exceeded revenue at both companies. While MarketWatch.com got about 73 percent of its revenue from online ads last year, the comparable figure for TheStreet.com was 55 percent. Subscription fees at TheStreet.com provided another 36 percent of 1998 revenue, with the balance attributed in its filing to ''other.'' Subscriber and advertising levels are rising at TheStreet.com, though, according to the SEC filing. The company now has about 50,000 subscribers, up from 37,000 in February. And TheStreet.com already has contracts for $3.7 million in advertising this year, exceeding the $2.5 million in advertising revenue generated during all of 1998. Cramer Contract Much of the Web site's popularity can be attributed to Cramer, a 44-year-old money manager and journalist who serves as an outside contributor to the news operations. A sign of Cramer's importance: the company signed him to an employment contract that runs through February 2003, even though he isn't officially an employee. Under the contract, updated in February, Cramer agreed to write at least 12 articles a week for TheStreet.com and participate in interactive chat rooms on the company's Web site, as well as those run by America Online Inc. and Yahoo! Inc. In return, the company promised to pay Cramer an initial salary of $250,000 a year and awarded him options to buy 333,333 common shares at $3 each. Cramer also could get a big payoff from his existing stake in the company -- 3.58 million common shares. These holdings, which will equal a 14.3 percent stake after the IPO, would be worth about $46.5 million if the IPO price is $13 a share. The company got a boost in February when the New York Times Co. said it would invest $15 million in TheStreet.com. Today's SEC filing shows the investment included $3 million in cash, with the other $12 million paid in the form of services over four years. TheStreet.com estimated its IPO will raise about $59 million after expenses if the shares sell for $12 each, the mid-point of the estimated price range. At this time, the company has not made specific plans for how to spend the proceeds, the SEC filing said. The company will have 25.1 million shares outstanding after the stock sale, the filing said. That would give the public a 21.9 percent stake.