Record Number of Internet IPOs Storm Street
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In the wake of Tuesday's huge sell-off, the most Internet IPOs ever to debut in one day began trading Wednesday.
And while two of the five Internet stocks opened fairly strongly, none appear positioned to have the kind of first-day splash that eToys had last week.
Spanish language portal StarMedia Network (STRM) quickly climbed to $25.63, a healthy 71% above its $15 offer price.
Online broker DLJdirect (DIR), meanwhile, opened at $26.38, a 32% increase over its $20 offer price.
Though based in New York, StarMedia's primary market is south of the border. The company runs the most-popular Spanish language Web portal in Latin America. Investors include online auctioneer eBay and e-mail services outsourcer Critical Path.
Like its English-language counterparts such as Yahoo!, Lycos and Excite, StarMedia offers visitors content organized in "channels," as well as search capabilities, free e-mail and online shopping.
The company had $5.3 million in revenue in 1998, against $45.9 million in net losses.
The slew of 'Net stock debuts comes one day after this week's most prominent Internet IPO, that of online bookseller barnesandnoble.com. Though it raised $450 million in its offering, the online bookseller closed trading Tuesday at $22.94, a rather ordinary (by Internet standards) 22.5% above its $18 offer price.
Many market watchers expected that barnesandnoble.com's high brand recognition, like that of eToys last week, would serve as fuel for its first-day ride.
However, BNBN shares were held down by a number of forces, not the least of which was poor timing. Last fall, when the online division of Barnes & Noble originally filed for its IPO (only to cancel soon after when German media giant Bertelsmann bought a 50% stake from the retail bookseller), it was seen as a legitimate potential threat to Amazon.com.
Since then, however, Amazon.com has transcended the category of mere book, video and music e-tailer, adding a number of product lines and features, including auction services, pet supplies and pharmaceuticals in its bid to become the Walmart of cyberspace. With Q1 revenues of $294 million, Amazon.com is doing nearly 10 times as much business as barnesandnoble.com (which had $32 million in Q1 sales).
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