RealTime IT News

Internet IPOs Take Post-Holiday Breather

After sprinting into the mid-summer holiday weekend, the Internet IPO market should ease up this week, as only eight Net companies are tentatively scheduled to begin selling stock.

And since there always are a few companies that don't make it out (indeed, four of the eight on this week's roster are holdovers), we could see five or fewer Internet companies hit the street by Friday.

None of this week's expected entrants are household names, but as the recent torrid debut performances of companies such as Ask Jeeves, Commerce One and Ariba demonstrate, you don't have to be an Amazon.com or eBay to rocket on the first day of trading. Here are three that hope to take the next ride:

  • Liquid Audio (Nasdaq: LQID), a maker of software that allows consumers to download digital-format songs from the Internet. But the Redwood City, Calif., company's target markets are record labels, Web sites and artists; 99 percent of its revenues come from software licensing fees and business development deals, though the company has begun heavier promotion of its digital delivery services. Liquid Audio and lead underwriter Lehman Brothers are offering 3.6 million shares in a proposed price range of $10-$12.

    The company's main selling point -- its secure digital format avoids the piracy problems associated with the MP3 format -- could make many investors overlook accumulated debt of $20.2 million through March and warning in S-1 filing that "we expect to continue to incur losses and negative cash flows through at least 2002."

  • HealthGate Data (HGAT), a medical content provider targeting healthcare professionals. Company's revenue ($2.4 million in '98) comes from a mix of service fees, online advertising and e-commerce. While '98 sales doubled the '97 total, Q1 sales of $615,000 were below the $626,000 from the year-ago quarter. Besides healthcare information systems giants such as McKesson HBOC, HealthGate faces formidable competition online from WebMD and drkoop.com. Based in Burlington, Mass., the company hopes to raise $50.6 million in an offering of 4.6 million shares with a pricing range of $10-$12. Lead underwriter is SG Cowen.

  • Travelscape.com (RSVN), another contender in the crowded field of companies offering online travel-related services such as airline tickets, hotel rooms and air/hotel packages. The company cuts deals with major airlines and hotel chains, including Marriott, Hilton and Doubletree, as well as hotels in its hometown of Las Vegas.

    Travelscape.com had $20.9 million in sales last year, along with a net loss of $4.4 million. Among its many competitors are priceline.com and Preview Travel. Travelscape.com is offering 5 million shares in the $10-$12 price range. U.S. Bancorp Piper Jaffrey is lead underwriter.