BigStar, Others Stumble Out of IPO Gate
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Summer sell-offs and short rides be damned, the Internet IPOs just keep coming: More than 20 'Net companies are slated to launch stock offerings this week.
You read correctly. This week, not this month. And right after a stunning flurry last week (11 IPOs in three days) that enabled July to set a record for the most Internet public offerings.
Four IPOs were priced Monday for trading Tuesday: 1-800-FLOWERS.COM, BigStar Entertainment, Quotesmith.com and Splitrock Services. By early Tuesday afternoon, each had opened at or close to their respective offering prices)
Like a number of Internet companies that went public in the second half of July, when the entire 'Net stock universe hit a slump, BigStar's debut on Tuesday had little bang to it. Offering 2.5 million shares at $10 each, the Silicon Alley company opened at $10 before falling to $8.03 by 1 p.m.
The company's IPO has several factors working against it: 1) There is a glut of 'Net IPOs, which is dragging down first-day and aftermarket performances across the board; 2) The market has been "soft" on e-tailers all summer, as that category is among the poorest performers in recent weeks among the 12 sectors listed in our Internet StockTracker weekly newsletter, and 3) Fierce competition, especially on pricing, from Amazon.com and countless other e-tailers, as well entertainment companies such as Sony.
Hundreds of local video stores have been wiped out in recent years by chains like Blockbuster that moved into the neighborhood. On the Web, of course, there's a large seller of videocassettes, DVDs and laser disks on every corner. It's hard to see BigStar flourishing in this heatedenvironment. At some point a merger or acquisition is likely.
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