It Must Be Comeback Week
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One day after the ticker debut of musicmaker.com -- the online music seller that went public just two months after postponing its IPO -- another Internet company has dusted off a scrapped public offering.
Shares of Web services company Interliant (Nasdaq: INIT) -- which initially filed registration papers on March 12, days after it was purchased by Sage Networks, only to delay the IPO in June -- began trading Thursday. The opening price of $15.56 per share was 56 percent above the $10 offer price for 7 million shares.
musicmaker.com (HITS), meanwhile, opened trading Wednesday for its 8.6 million shares at $20.25, or 45 percent above the $14 offer price. HITS shares finished first-day action at $23.94, a respectable debut. However, while shares opened higher on Thursday ($24.88), they had dropped below $22 by early afternoon.
It's unusual for one company to buy another and then take the name of the acquired firm, but Sage Networks clearly saw greater brand value in "Interliant." (Of course, the way networking IPOs have been skyrocketing, share flippers probably wish the new entity had stuck with the Sage name.)
Interliant launched services in December '97 and recorded $4.9 million in revenue last year, against a net loss of $9.7 million.
But Interliant is relying on an ambitious acquisition strategy, and in the past 18 months has acquired 17 companies that offer Web hosting and other Internet services. Using pro forma numbers, 1998 revenue was $41.3 million versus a net loss of $39 million.
The company's competitors are many and formidable. They include global telcos such as AT&T and British Telecommunications, national ISPs such as UUNET and MindSpring and other Internet services companies such as Exodus Communications and AboveNet Communications, which is being purchased by Metromedia Fiber Network.
Maybe Later, Maybe Never
In a May StockTracker Daily, I wrote that we may start to see more Internet companies bail out of IPO plans because the market is saturated with 'Net plays and investors are becoming choosier.
Besides GreenMountain.com, several other Internet companies have postponed their IPOs, including e-tailer DVD EXPRESS, e-mail services provider USA.NET and Focal Communications, a CLEC that provides data and voice service to corporations and ISPs.
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