Soft Launch Pad Makes For Short IPO Flights
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Many small investors often express frustration that they can't get in early on hot Internet IPOs. Lacking the clout and connections of large institutional investors and underwriter insiders, the average individual investor often must wait weeks or months before a soaring Internet stock re-enters the atmosphere.
Well, based on last week's Internet IPOs, there's not a whole lot of soaring going on these days. All eight 'Net stocks that began trading last week ended Monday's session below their first-day closing price.
This includes big openers such as Portal Software and Media Metrix, as well as NetObjects and COMPS.COM, which stumbled out of the gate. Compare this to just two months ago, when the market was still hot. The stock prices of some Internet companies that launched in March remained well above their first-day close for days and weeks. At least one has never fallen below its opening-day finish.
The numbers below include the first-day closing price, Monday's closing price, and the percentage change (in parenthesis):
- MapQuest.com -- $22.38 -- $22 (-1.7%)
- Flycast Communications -- $29.75 -- $25.75 (-13.4%)
- Silknet Software -- $35.13 -- $23.19 (-34.0)
- COMPS.COM -- $14.25 -- $10.06 (-29.4%)
- Portal Software -- $37.38 -- $27.75 (-25.8%)
- NetObjects -- $13 -- $12.06 (-7.2%)
- Media Metrix -- $45.56 -- $45.12 (-1.0%)
- AdForce -- $29.94 -- $29.88 (-0.2%)
Now let's look at some of the March IPOs and how they've performed:
- NEON Systems - Closed at $25.06 on March 5. Since then it has never traded below that price and has closed in the $30s and $40s (and twice in the $50s) since. Monday's close was $38.25, or 53% above the first-day close.
- RoweCom - Closed at $30.25 on March 10. Slipped below that figure a week later, closing on March 17 at $29.25. Climbed into the $40s in early April, but has closed below $30 since April 27. Finished Monday at $23.50, or 22.3% below its first-day close.
- FlashNet Communications - Closed on March 16 at $43.63, then staggered and didn't reach that number again until April 1, when it closed at $43.75. Except for a brief surge in mid-April, has subsequently traded in the $30s. Closed Monday at $31, or 28.9% below its first-day close.
- Multex.com - Closed on March 17 at $33.63. Hovered around that figure for a week before jumping to $62.50 on March 31. Closed in the $50s for most of April before slowly descending. Closed on Monday at $34.88, or 3.7% above its debut closing price.
- IVillage - Closed on March 19 at $80.13, stayed below that figure for
the better part of a week, then went on a wild ride that saw share
prices top $100 several times in April. Now in the midst of a deep
decline, iVillage shares closed Monday at $66.75, or 16.7% below the
From analyzing these stock performances, two points emerge: 1) The days of the automatic Internet IPO rocket launch are over, if only for the moment. 2) Even a sizzling market, such as the one we saw in March, doesn't guarantee an IPO blastoff for every Internet company. In the slow days,we just remember it that way.
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