Back in the Saddle
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Yes, it has been a long slumber since we saw an IPO. And, unfortunately, it will take some time for the IPO market to mend its wounds. Yet, the recent strength in Nasdaq should pave the way for a healthy IPO market.
Okay, we only have three IPOs planned for this week - none of which are Internet companies.
While many IPOs were failures last year, the biotech sector was fairly strong. So, it is no surprise that this week there is a biotech company ready to hit the markets. The company is Xenogen.
The company is young, with its products introduced in 1997. Although, the company has been able to sign marketing agreements with such giants as Pfizer and Novartis.
Yet, the revenue base is still small. In the first nine months of 2000, revenues were $7.2 million and losses were $10.2 million. This is likely to be troubling for IPO investors.
The lead underwriter is UBS Warburg and the price range is $10-$12 (the company plans to issue 7 million shares). The proposed ticker symbol is XGEN.
Next, Peet's Coffee plans to go public. It is a competitor to Starbucks (and I think the coffee may be even more expensive at Peet's).
But unlike the Seattle powerhouse, Peet's is a shadow of Starbucks. For the first nine months of 2000, the company had revenues of $59.4 million and losses of $2.7 million.
What is interesting about the IPO is the means of distribution. The company will sell shares using an online Dutch auction system called OpenIPO. However, because of the small size of the company, do not expect many fireworks.
The lead underwriter is WR Hambrecht and the price range is $10-$14 (the company plans to issue 3.3 million shares). The proposed ticker symbol is PEET.
Rather, it looks like this week's hot IPO will be Align Technology. The company is gunning after the huge market for crooked teeth. Of course, one solution is braces. But they don't look particularly attractive, right? Well, Align has developed clear braces.
But there is no guarantee with this company. It is, for the most part, early stage. For the first nine months of 2000, losses were a staggering $53.3 million and revenues were a mere $3.5 million. Then again, the company has recently launched a TV advertising campaign.
The lead underwriter is DB Alex. Brown and the price range is $14-$16 (the company plans to issue 10 million shares). The proposed ticker symbol is ALGN.