In Nasdaq We Trust
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The key to a resurgent IPO market will be a resurgent Nasdaq. Last week, there were signs that, yes, Nasdaq may be coming back to life. After all, the index was up for three consecutive days (the first time in four months). This was the case despite some tough earnings reports, such as from Yahoo! and Hewlett-Packard. This type of bad news - say a month ago - would have tanked the market.
And wasn't online advertising supposed to be dead? Maybe not. DoubleClick surged $3.50 to $14.75 when it reported its earnings last week.
True, this is anecdotal evidence of a bottom. But it is very hopeful nonetheless.
Interestingly enough, there is even a dot-com company planning to go public. It is Sportingbet.com, which will be listed on the London Alternative Investment Market. The company expects to raise $64 million. For the first six months of 2000, the company had sales of 114.1 million and losses of 4 million (in pounds, of course).
Back in the U.S., though, there is still clean-up in the IPO market. The AltaVista search engine decided to nix its offering last week. CMGI holds 81.6 percent ownership in the company and Compaq owns 18.2 percent.
Another withdrawal came from Haht Commerce. The company is a provider of e-business software solutions.
In fact, during the fourth quarter of 2000, there were 93 companies that decided to withdraw their IPOs. Yet, there were companies that were still filing to go public during this period - 65 in all.
Basically, the IPO market is becoming more discerning. But it is not the end. No doubt, expect lots of excitement from IPOs in 2001.
For example, keep an eye on NTT DoCoMo. The company is the developer of the widely popular "I-mode" Net mobile phone. It is the craze in Japan and is making huge sums of money.
The lead underwriters include Goldman Sachs and Nikko Salomon Smith Barney. DoCoMo will announce the pricing information for the offering between February 1st to the 6th.
The company does not lack ambition - and is definitely not afraid of IPO investors. DoCoMo plans to raise a whopping $6.8 billion. But the company will need the cash. It has spent $16.1 billion to buy stakes in foreign mobile phone companies during the past year. The goal is to develop third-generation mobile products.