Return Of The Web IPO: Wall Street Candidates Await Market Muse
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A long time ago in a stock market far far away Internet IPOs sprouted like tribbles at a Star Trek convention. After August 31's haircut, the filing frenzy subsided. So who's in the pipeline?
Infospace, Healtheon, eBay, theglobe.com, Xoom have all filed for IPOs and await the market's muse before pricing. Many of these are expected to hit the Street in October/November so long as the market outlook stays "cautiously optimistic."
The leading market indicator, ISDEX, The Internet Stock Index, bellwether shows some signs of recovery after the heavy 'G' force it experienced two weeks ago when Russia called Wall Street on the special hot line and said "nyet" to the ever-rising bull.
Healtheon, founded by Netscape co-founder Jim Clark, wanted to tap Wall Street for $75 million. For the six months ending June 30, it's generated $20.6 million revenue and a $21.4 million loss. Healtheon was originally to be called "Healthscape" for those of you who remember. Healtheon's goal is to provide a platform, the Internet, for the healthcare industry to share dataflow between healthcare providers, insurance companies.
Of the IPO amigos shown, both theglobe.com and Xoom focus on the community space. theglobe.com wants to raise $50 million. It reports 1.7 million members and 6.1 million unique monthly users. Since its founding, theglobe.com has experienced strong growth. theglobe.com adds about 100,000 new members per month who look at more than 100 million page views.
According to Media Metrix, theglobe.com was ranked as the fourth fastest growing Web site in terms of audience reach for the first half of 1998. Revenue: six months ending June 30 totaled $1.1 million with $5.8 million net loss.
Xoom, meanwhile, wants to raise $46 million via IPO and is the second-fastest growing Web site this year according to Media Metrix, with 3 million "members" (a member is someone in its e-mail database and/or Web site builder). It adds 20,000 more a day.
Xoom's tack has been to offer chat, home pages, e-mail, and other free services and sell the tools and picks to build out the Web site. Direct marketing-sales generate revenue. Through June, 1998, 72% of the Xoom's $2.8 million net revenue was derived from electronic commerce and approximately 36% of net revenue was derived from non-U.S. sales. Ad sales made up $406,000.
Infospace aims to raise $57.5 million with its IPO. Infospace brings together more than 75 content sources for distribution of its affiliates sites and outlets, including Internet portals, destination sites and suppliers of PCs and other Internet access devices, such as cellular phones, pagers, screen phones, television set-top boxes, online kiosks and personal digital assistants.
The Web directory-content aggregator posted $2.9 million revenues through June 30 and a $4.5 million net loss. Infospace's revenue comes mostly from a handful of large Web site partners it pays carriage fees to including AOL, Netscape and Lycos. It inked the AOL deal August 28 with a clause that gives AOL right of first negotiation in a takeover.
While its focus has been on providing outsourced content in the form of directories, Infospace now looks like it may be turning its sights inward to make Infospace.com more of a destination than in the past.
Given July's rush and April's peaks, Internet stocks are a long way from the summits seen this year. Will the IPO market rekindle? September is a sleeper traditionally and October may provide a window for this group to debut. More than ever the market takes its cues from the economic broad strokes. Not unlike Star Wars, the jump to hyper speed--a huge IPO valuation--may be as close as an upswing in the Dow or as far yonder as another disturbance in the force.
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