RealTime IT News

Internet IPO Pipeline Is Bursting

That sound you've been hearing since New Year's Day is the Internet stock engine revving into hyperdrive.

While many pundits and traders have been saying for months that the latest bout of Internet stock mania will soon subside, the record pace of 'Net-related IPOs and filings so far this year suggests otherwise.

In January and February, 36 Internet companies filed IPOs, while 13 made it out to Wall Street (we're double-counting online health care services firm Healtheon, which filed in January and went public in February).

Compare that to January and February of 1998, when only two Internet companies filed IPOs and a mere four went public.

February must have been on steroids. By our count, nine Internet companies went public last month, the highest monthly total ever, and 25 more filed IPOs, yet another record.

To put these IPO numbers into perspective, consider that 34 Internet companies went public in 1998 -- a big year by anyone's reckoning -- and 23 hit The Street in '97.

Obviously this early frenetic pace can't be expected to continue through the year. Several variables could put a chill in the Internet market, particularly a sharp nosedive by high-profile high-flyers such as eBay, Yahoo! and Amazon.com, or if a number of new offerings stumble out of the gate.

Neither happened last month. Despite occasional turbulence, the Internet high-flyers as a whole are maintaining altitude.

And of the nine February IPOs, only Intraware (which just went out Friday) and Digital Lava have lingered near their offering prices. The other seven got airborne fast, trading at either twice the offering price or -- in the cases of Healtheon, VerticalNet and Pacific Internet -- at least three times the offer price.

Though IPO plans sometimes change (barnesandnoble.com and PointCast, where are you?), the bursting pipeline for Internet stock offerings hints at a frenetic spring.

Among the Internet companies expected to make their ticker debut this month are:

  • GenesisIntermedia.com (GMGI), which sells interactive marketing services to businesses engaged in electronic commerce. An offering of 2 million shares between $7 and $10 each is expected this week.

  • NEON Systems (NESY), a vendor of Web-to-legacy system middleware, also due out this week with plans to offer 2.5 million shares for $13 to $14 each.

  • priceline.com (PCLN), the "name your price" online retailer, which bumped back its IPO from last week to next week. Share amounts and price haven't been announced, but lead underwriter Morgan Stanley Dean Whitter is hoping to raise $115 million. (priceline.com currently is running an ad campaign to raise customer awareness and give the stock offering an extra jolt.)

  • iVillage (IVIL), a developer of Web content sites geared toward women. The company is slated to offer 3.65 million shares from $12-$14 sometime next week.

  • FlashNet Communications (FLAS), a provider of Internet access and services. FlashNet plans its IPO for next week, with 3 million shares at $12 to $14 each expected.

We'll take a closer look at some of these companies in coming days, including their business plans, market sectors and overall prospects.