Correction Crashes March Internet IPOs
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After beginning the month like a lion, the Internet IPO market exited March like a bear.
The 27 new Net stocks posted an average first-day gain of 99 percent, making March the first month since last September to average below triple-digits.
The difference between the early and latter parts of the month was dramatic in terms of first-day performance for new Net tickers. Eight of the 14 Internet IPOs launched through March 15 more than doubled in price in their debuts, while only two of the 13 from the second half of the month reached triple-digits.
Moreover, the average gain for the first group was 151 percent, while the latter group - which featured four companies that fell below their respective offer prices - was only 42 percent.
Sounds like a glut, but demand for Internet stocks continues to outstrip supply, which is why so many companies with scant operating histories and no profit have been propped up by market dynamics and, to be honest, irrational exuberance.
However, the sobering market events of the past two weeks or so seem to have forced investors to finally buckle down and view new Internet offerings with a clear, critical eye. This should last until the next Net stocks run-up.
Here's how things looks so far compared to last year:
Average First-Day Return (By Month)
10 Best Internet Debuts of 2000
|eMerge Interactive||Feb. 4||215%|
10 Worst Internet Debuts of 2000
|Hanaro Telecom||March 29||-9%|
|SAVVIS Communications||Feb. 15||0%|
Here are the March Interne