RealTime IT News

Correction Crashes March Internet IPOs

After beginning the month like a lion, the Internet IPO market exited March like a bear.

The 27 new Net stocks posted an average first-day gain of 99 percent, making March the first month since last September to average below triple-digits.

The difference between the early and latter parts of the month was dramatic in terms of first-day performance for new Net tickers. Eight of the 14 Internet IPOs launched through March 15 more than doubled in price in their debuts, while only two of the 13 from the second half of the month reached triple-digits.

Moreover, the average gain for the first group was 151 percent, while the latter group - which featured four companies that fell below their respective offer prices - was only 42 percent.

The nosedive taken by Internet stocks in the latter half of the month clearly dragged the IPO market down with it. But the market also has seen a record number of Internet IPOs for the first quarter. The 59 Net ticker debuts through March are more than twice the number from last year's Q1.

Sounds like a glut, but demand for Internet stocks continues to outstrip supply, which is why so many companies with scant operating histories and no profit have been propped up by market dynamics and, to be honest, irrational exuberance.

However, the sobering market events of the past two weeks or so seem to have forced investors to finally buckle down and view new Internet offerings with a clear, critical eye. This should last until the next Net stocks run-up.

Here's how things looks so far compared to last year:

Month This year 1999
January 5 4
February 2711
March 2713
Total 59 28

Average First-Day Return (By Month)

Month This Year 1999
January 160% 241%
February 126% 122%
March 99% 134%

10 Best Internet Debuts of 2000

Company IPO Date Gain
webMethods Feb. 11 508%
Crayfish March 8 414%
Selectica March 10 371%
FirePond Feb. 4 356%
Neoforma.com Jan. 24 303%
Extensity Jan. 27 256%
ArrowPoint March 31 248%
GigaMedia Feb. 17 226%
net.Genesis Feb. 29 216%
eMerge Interactive Feb. 4 215%

10 Worst Internet Debuts of 2000

CompanyIPO DateGain/Loss
ARTISTdirect March 28 -22%
PartsBase.comMarch 22-12%
ImproveNet March 16 -12%
Hanaro Telecom March 29 -9%
VarsityBooks.comFeb. 15 -1%
SAVVIS Communications Feb. 15 0%
Pets.comFeb. 11 0%
b2bstores.com Feb. 152%
Etinuum March 24 3%
eSafetyWorldFeb. 18 6%

Here are the March Interne