Internet IPOs Brave New World
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Maybe they've been so busy preparing paperwork and dreaming about stock options that they just haven't noticed.
Despite a spring swoon that has ravaged 'Net stock prices and gutted the after-market performance of most of the sector's IPOs, Internet companies continue to file registration papers for public offerings at a frenetic pace.
It's almost as if these companies are afraid they'll miss their window of opportunity to cash in on the latest Internet IPO gold rush.
They shouldn't worry, of course, because they already have missed it. Whereas two months ago it was routine for Internet IPOs to rocket off the launch pad, since May most have performed like puddle-jumpers.
In the first half of April, 11 Internet companies filed IPO registration documents. That number rose to 19 in the second half of the month, even though the market was rocked by corrections prompting well-founded speculation that 'Net stock offerings may have reached a saturation point.
The pace picked up in May, as 23 Internet companies filed with the SEC during the first half of the month, with another 21 submitting papers in the latter half.
(Here's a fun quiz question: Of the 76 Internet companies filing to go public from April through June 2, how many have ".com" in their name? The answer and a list of the companies can be found at the end of the column.)
The Internet companies that submitted IPO papers in early April are just now starting to go public. The first of the group, traffic controller software vendor F5 Networks, priced 3 million shares on Friday at $10 each, the low end of its proposed $10-$12 price range. A couple of months ago, F5 might have priced at $12, $14 or even higher.
Two others, Internet consulting firm Viant and e-mail outsourcer USA.NET, are slated to debut next week. They too will be entering a far different world than they probably expected only 10 weeks ago.
Granted, the IPO market can, and probably will, heat up again. Don't expect it at least until late summer, though. In the meantime, the dozens of Internet IPOs in the pipeline will have no updraft to rely on for an altitude boost. They will have to gain share price the old-fashioned way - by earning investor confidence.
Quiz answer: Of the 76 companies in question, 25 of them - or almost one-third - have ".com" in their names. Here they are, in alphabetical order:
- PC Flowers & Gifts.com
- US SEARCH Corp.com
- Women.com Networks
Notice which one has the last word?
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