IPOs in Short Supply
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For the first part of the year, the Nasdaq was gas 'n' go. All that the momentum investors heard was the siren song of tech stocks. That came to an end when these investors' nerve failed and they panicked. The result was the 25 percent drop in the Nasdaq.
This last week, buyers were back. On Tuesday, the Nasdaq had its biggest one-day point gain, 254 points. For the week, there was positive gain. Even the Queen of the Net, Mary Meeker, has proclaimed that the worst is over. Lets hope so.
As for last week, there were only a few IPOs. Then again, it was a short trading week due to Good Friday.
QS Communications (QSCG) gave it a try on Wednesday. QS Communications rose 26 percent to 30 1/8 from its opening of $24.64. It was down to 28 = on Thursday.
The lead underwriter was Morgan Stanley Dean Witter.
On Thursday, 360networks (TSIX.), a fiber-optic network builder, priced their IPO at $14, which was under the proposed $16 to $18 range. This was a shrewd move as 360networks rose 36% to 19 by the end of trading. In the New Net reality, such a rate of return is consider very good.
360networks is quite the fiber-optic builder. They project that by the end of 2001, their overall network will be approximately 56,300 route miles, mainly in North America and Europe. They are also building two fully protected undersea cables. One is a 7,600 route mile cable between America and Europe and the other, a 14,000 route mile cable between South America and North America. Seems like there is lots of this cable already but investors nonetheless are interested.
The co-lead managers were Goldman, Sachs and Donaldson, and Lufkin & Jenrette.
The San Francisco-based Embarcadero Technologies (EMBT) also got a good reception. They too lowered their initial price and saw a 60 percent increase. It went from 10 to 16, raising $42 million.
Embarcadero Technologies helps companies with their enterprise and e-commerce databases. Its primary product, DBArtisan, works across multiple operating and hardware systems. Customers includ GTE, AT&T Wireless Services, Bank of America, and Universal Studios.
The lead underwriter was Donaldson, Lufkin & Jenrette.
PEC Solutions (PECS) just was not buff enough. Facing little investor interest, it had dropped its opening price. It wasn't enough. It opened at 9-1/2 and staggered to 9 by the end of the trading.
The Fairfax, Va., PEC Solutions provides Internet and security technology services mainly to government, often building their applications from the ground up, as well as integrating with legacy systems. They provide encryption programs to protect sensitive information, including biometric authentication, a process that identifies people by their physical characteristics. Definitely cool stuff. But it was not what investors wanted.
Donaldson, Lufkin & Jenrette was the lead underwriter.