RealTime IT News

Have Profits, Will Travel

The trend continues - IPO investors want strong, profitable companies. Period.

This was evidenced by last week's IPO of KPMG . It was a mega offering, as the company raised about $2.02 billion.

The IPO was priced at $18 and ended its first day of trading at $23.48. The company is a leading consulting firm for the Global 2000 companies. As of 2000, revenues were about $2.37 billion and profits were $679.4 million.

Now, there were two other IPOs last week. Unfortunatley, they paled in comparison.

There was Oil States International . The company develops specialty products for the oil and gas industry. For the first nine months of 2000, revenues were $437.4 million and profits were $18.6 million. Although, the company's financials have been eratic over the years.

In order to launch the IPO, the company's investment bankers had to do some legwork. The offering price was at $9, which was well below the $11-$13 price range. In all, the company raised about $90 million.

On the opening, the stock increased a minuscule 2 cents and ended its first day of trading up 15 cents.

There was a biotech IPO that hit the markets: Third Wave Technologies . But it certainly didn't generate any waves.

The company develops testing systems for early detection of cancer. For 2000, the company had revenues of $11.4 million and losses of $53.7 million.

The IPO was priced at $11, which was on the low end of the $11-$13 price range. The company raised about $102 million.

The IPO opened up 25 cents and closed trading up 6 cents.

Upcoming Week's IPOs

OMP plans to go public this week. The company is a distributor of a product called Obagi Nu-Derm, which helps to slow-down the aging process for skin. Revenues have been running strong, going from $16.2 million in the first nine months of 1999 to $25 million in the same period in 2000.

The price range is $11-$13 and the company expects to issue 4.5 million shares (the price range had been reduced from $14-$16). The lead underwriter is CIBC World Markets and the proposed ticker symbol is OMPI.

What else to look forward to this week? Keep an eye on River Networks.

The company is a developer of sophisticated routers for Internet Service Providers (ISPs), like British Telecom and Earthlink Networks. It helps with such things as bandwidth management and quality of service. While the company had revenues of $23 million, losses were $37 million in 2000.

But the recent fall in Nasdaq - concentrated mostly in the tech issues - will definitely put downward pressure on this IPO.

The lead underwriter is Morgan Stanley and the price range is $11-$13 (the company plans to issue 10 million shares). The proposed ticker symbol is RSTN.