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E-Mailbag Monday: IPOs, Knight Trading Group, CDPD


What looks good for the IPO market this week?

Reply: Finally, the IPO market is back from vacation. In all, there are seven IPOs planned for this week. Of these, two look particularly promising.

First, there is INRANGE Technologies. The company is a developer of switching technologies for storage (for example, fibre channel). In fact, the company is no slouch, as it had revenues of $200.6 million and profits of $22.3 million in 1999. The company's market space has been extremely hot. A recent IPO was McData , which was priced at $28 and is now trading at $92.

The lead underwriter is Salomon Smith Barney and the price range is $12-$14 (the company intends to issue 7.7 million shares). The proposed ticker symbol is INRG.

Also, take a look at TTM Technologies. The company is a developer of sophisticated circuit boards. What's more, TTM has the ability to manufacture the technology at break-neck speed (in some instances, within 24 hours).

Like INRANGE, TTM Technologies has strong financials. In 1999, sales were $106.7 million, although there was a small loss of $267,000. But in the first six months of 2000, the company has been able to turn a profit of $5.1 million on sales of $88.1 million.

The lead underwriter is Robertson Stephens and the price range is $13-$15 (the company plans to issue 7.5 million shares). The proposed ticker symbol is TTMI.

A White Knight for Knight Trading Group?

What's your view on Knight Trading Group, especially in light of the recent M&A activity?

Reply: It's been mind-spinning to see the mega mergers in the financial industry. And, expect more. In fact, it looks almost inevitable that Knight Trading Group will be purchased soon.

Of course, Goldman Sachs' recent acquisition of Spear, Leeds & Kellog has added fuel to the speculation. There was also the acquisition by Merrill Lynch for Herzog, Heine & Geduld.

Interestingly enough, of the top 10 market makers, Knight is the only remaining publicly traded entity.

Because of this, Knight would fetch a premium in a buyout. In other words, I still think there's upside with the stock.

CDPD = Wireless

What is CDPD?

Reply: This stands for Cellular Digital Packet Data. It is a network that has coverage of more than 3,000 cities in the U.S. As the name implies, CDPD relies on packet data transmissions. This makes it possible to provide cost-effective wireless services to customers.

This week, there is an IPO called OmniSky that uses the CDPD network. Basically, the OmniSky service allows handheld devices to have such things as e-mail and Web browsing. Currently, the service is being used for the Palm V.

The lead underwriter is CS First Boston and the price range is $10-$12 (the company intends to issue 9.1 million shares). The proposed ticker symbol is OMNY.



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