Investors gripe that they can’t buy an Internet IPO. Which is effectively
true. Even the paltry shares the e-brokers offer is a token tossed to the
retail investor. But if individual investors had bought each one of the six Internet
public offerings at the lows (meaning the stock was trading already) they’d be
Overall, the six IPOs this year gained 179% from initial price and flirted
with gains of 338% at their collective highs. Internet companies sold an
of about 4 million shares at $15.50 per share. The group raised more than $360
million proceeds or an average of about $60 million.
Notable is that our analysis indicated in 1995 and 1996 that the gross
proceeds of an average Internet IPO was about $35 million to $40 million. Now the game is
that much more expensive.
Let’s look at the 1999 list:
internet.com’s IPODEX – INTERNET IPO INDEX
|Company||Stock||Shares||IPO share||11-Feb||Change from||Share||Change from||Share||Change from|
|MarketWatch||MKTW||2.75||$ 17.00||$ 72.00||324%||$ 130.00||665%||$ 60.00||253%|
|Healtheon||HLTH||5.00||$ 8.00||$ 31.38||292%||$ 33.25||316%||$ 21.75||172%|
|Verticalnet||VERT||3.50||$ 16.00||$ 45.38||184%||$ 55.44||246%||$ 35.06||119%|
|Allaire||ALLR||2.50||$ 20.00||$ 47.75||139%||$ 69.00||245%||$ 34.00||70%|
|Pacific Internet||PCNTF||3.00||$ 17.00||$ 35.00||106%||$ 88.00||418%||$ 26.25||54%|
|Prodigy||PRGY||8.00||$ 15.00||$ 28.13||88%||$ 32.00||113%||$ 20.00||33%|
Biggest winner so far this year was MarketWatch.com (NASDAQ:MKTW), the
financial news provider.
MarketWatch has a great editorial product and dozens of staff focused on
providing near real-time news. It shows. Amazing what a little investment in
people can do.
Healtheon (NASDAQ:HLTH), meanwhile, jumped out of the gate and climbed 292%
from IPO price. The Internet-based healthcare industry networking provider
smartly kept its per share price affordable for the indy investor, allowing
to snap up shares in the aftermarket, although it sold 5 million shares. We
think Healtheon has a chance to revolutionize healthcare but that the road
hard one given the dysfunctional healthcare system.
VerticalNet’s (NASDAQ:VERT) story relies on its 33 "trade
communities" (verticals) with such nuts and bolts names as
pulpandpaperonline.com or meatandpoultryonline.com. It posted $2.3 million pro
forma revenue in 1998, up 323% vs. 1997. Thes etrade communities target the
ebusiness sector at providing them info and commerce opportunities.
Allaire (NASDAQ:ALLR) is best known for its Cold Fusion software that
people to create fairly complex Web sites with fancy features with little pain
involved. ALLR’s revenue for the fourth quarter of 1998 was $6.6 million, up
116% vs. 4Q97. Net loss for the fourth quarter of 1998 was $2.8 million vs.
million 4Q97. Total 1998 revenue hit $20.5 million, up 168% vs. 1997. Net loss
for the year reached $10.8 million vs. net loss of $7.4 million for 1997.
Pacific Internet (NASDAQ:PCNTF) was one of the higher flyers its first day
public up 418% from IPO price to $88 before settling down. This issue was more
than 30x oversubscribed as investors wanted in on an ISP with an Asia focus.
Singapore’s huge conglomerate SembCorp owns a majority of PCNTF after spinning
out part to the public.
Prodigy (NASDAQ:PRGY), not your father’s online service but the ISP,
most shares of the IPOs in the table, 8 million shares at $15, raising $120
million. The amount underscores the large amounts of capital that ISPs in the
U.S. must raise to compete. Mexican telecommunications powerhouse Carso Global
Telecom owns a majority of PRGY.
For analysis about other Internet IPOs that have gone public, as well as
to come please click here
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