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RealTime IT News

Repeat of Last January Not Likely

It looks like we won't see any Internet IPOs in the first half of this month, unless b2bstores.com, an online supplier of business products and services listed on some IPO schedules as pricing this week, rolls onto the launch pad later Friday.

Still, it wasn't until Jan. 15 last year that the first 'Net stock offering hit the street - and when it did, it was memorable. MarketWatch.com (MKTW), CBS's financial news and information Web site, was offered at $17 per share, opened at 90 and closed its first-day of trading at 97-1/2. That 474% first-day pop held up as the best Internet IPO debut of the year until Nov. 5, when it was finally eclipsed (barely) by Cobalt Networks' (COBT) public offering.

January went on to set two marks for Internet IPOs last year - the highest average first-day gain (241 percent) and the lowest number of offerings, with only four. The other three were Covad Communications Group (COVD), which had a debut closing price of 152 percent above its offer, Allaire (ALLR)(119 percent) and Tut Systems (TUTS)(219 percent).

You can expect a similarly low number of 'Net IPOs this month, since there are only about half-a-dozen on the docket, and some of those may opt to wait until the choppy market weather blows over.

Whether this low supply will fuel the kind of rocket rides seen last January is another issue. There's no doubt that a scarcity of new 'Net plays drives up first-day prices, just as a glut softens the market (just check some of last summer's low monthly averages, when the street was absorbing more than a dozen Internet IPOs some weeks).

With no 'Net plays slated for next week, the pent-up demand could trigger some explosive debuts as January winds down. But I'm not looking for anything approaching MKTW's first-day numbers, nor do I rule out a couple of fizzles. While investors may be eager, we are not now in a period of irrational exuberance.


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