Palm Illustrates Volatility of IPOs
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In its much anticipated debut, Palm (PALM), the maker of the Palm Pilot, jumped Thursday 150 percent to 94-15/16 from its opening price of $38. This gave Palm a market value of $53 billion.
On Friday the stock retreated to 80 1/4. Even by Monday, the stock continued to deteriorate, falling to $66-13/16. Investors getting sweaty palms?
It might be tempting to jump in. However, IPOs have been known to plunge a great deal. It is probably a better idea to wait several weeks, when the stock begins to stabilize.
Palm has sold 5.5 million of its hand-held computer devices over the last four years. It made $24 million on $435 million sales over the last six months.
Niku (NIKU) saw its initial IPO price of $24 rise to 69. By the end of the week, it was at nearly 94. NIKU provides Internet portals and solutions for professional business services organizations, services providers, small businesses and individual professionals. So far, the stock has been able to hold its value, trading now for about $90 per share.
Goldman Sachs was the lead underwriter.
Avenue A (AVEA), an online advertising firm, had a successful debut. Its 5.25 million shares start at 24 before closing at 72 on its first day. By week's end, it had settled a bit above 61. As of Monday, the stock had fallen to $56.
Avenue A helps advertisers increase the effectiveness of their advertising. The lead underwriter was Morgan Stanley.
Internet marketing company NetGenesis (NTGX) tripled from its offering at $18 to 56 13/16 on its first day of trading. It gave back a little and ended Friday at 49 5/8. Its software and services are designed to increase the e-commerce effectiveness of Web sites. Lead underwriters are Chase H&Q and Deutsche Banc Alex. Brown.
MatrixOne (MONE) was another hot issue. The stock rose to 73 13/16 on volume of 6.9 million for a gain of about 195 percent on it first day of trading. It slipped back to 69 3/8 by Friday.
Its Internet platform can be used with customers, suppliers and other business partners. The lead underwriter is Goldman Sachs.
Register.com (RCOM) generated $120 million in its Friday opening. By the end of trading, it had risen to 57 1/4.
Register.com has a track record in registering domain names in the .com, .net and .org domains worldwide. It plans to triple its advertising war chest to become the top registrar of Internet domain names.
Deutsche Banc Alex, Brown was the chief underwriter.
AsiaInfo (ASIA), the Beijing-based provider of Internet software, also debuted on Friday. It's opening price was $24, well above its expected $18-to-$20 range. The stock ended at 99 9/16. This showed investors' fire over expected Internet growth in Asia.
Morgan Stanley Dean Witter was the lead underwriter on this deal.
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