Altitude Woes Plague Internet IPOs
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With the notable exception of B2B software vendor webMethods' (WEBM) moonshot IPO last Friday (a first-day gain of 508 percent), the Internet IPO skies have been uncluttered in recent days, with a couple of Net debuts gaining modest altitude and several others misfiring altogether.
The casualty list: etailer VarsityBooks.com (VSTY), down 1.2 percent; health systems' software vendor VantageMed (VMDC), down 16.2 percent; and access and services provider SAVVIS Communications (SVVS), no gain. Only Sunhawk.com (SNHK), a maker of digital rights management software, showed any upward movement in its debut, gaining 54.2 percent.
Oh sure, you could count b2bstores.com, which offers janitorial and office supplies online. But it was a small offering ($32 million) managed by low-wattage underwriters (Gaines, Berland and Nolan Securities). More significantly, b2bstores.com only began commercial operations in September, and had only $2,191 in revenues through Dec. 31. Yes, that's $2,191 as in two thousand dollars and change.
webMethods, on the other hand, not only has a B2B story, it is riding a new technology (XML) that could be the next Linux in terms of attracting investment money and industry support.
So what will be the next Internet IPO to go into orbit? Eloquent, a maker of rich-media tools for Web-based presentations, opened Thursday at 38 per share, 138 percent above its $16 offer price. But it was falling in the afternoon, and may not even post a three-digit percentage gain.
I'll put my money on Inforte, a Chicago-based Internet consulting and services company that was scheduled to go public this week. On Friday, I'll explain why.