Looking back at 1999, you can only marvel at the explosion of investor
interest in Internet stocks and IPOs.
The market supported an
astonishing number of Internet plays, showing signs of strain only in
the summer, when glut of new ‘Net tickers flooded the street in the
weeks after a strong spring correction.
Which is not surprising, if you believe (as I do) that the economic
potential of the Internet is currently being undervalued in the market.
Couple this with a shortage of Internet stocks relative to demand, and
it goes a long way toward explaining the excessive valuations of so
many individual ‘Net stocks and IPO moonshots by companies with
virtually non-existent revenues.
By my count there were 258 Internet IPOs last year. Of those, 86, or
exactly one-third, finished their first day of trading with gains of at
least 100 percent over their respective offer prices. In contrast, only 28
companies (11 percent) ended their debut sessions below their respective offer
prices.
With that kind of record, and with billions of dollars in venture
funding priming the IPO pipeline with aspiring Internet stars, 2000
promises to be just as frenetic.
The year finished the way it began – consistently strong. The average
first-day return for December Internet IPOs was 108 percent, only slightly off
the average debut in October (112 percent) and November (118 percent). The two biggest
gainers of the year – FreeMarkets and Cobalt Networks – came in Q4,
while a look at the list of Top 10 first-day performers turns up a
number of e-commerce and infrastructure companies, investor favorites in
1999.
Here’s the year, month by month:
Internet IPOs By Month
January – 4
February – 11
March – 13
April – 17
May – 26
June – 32
July – 35
August – 26
September – 26
October – 21
November – 25
December – 22
Total – 258
Average First-Day Return By Month in 1999
January – 241 percent
February – 122 percent
March – 134 percent
April – 116 percent
May – 59 percent
June – 48 percent
July – 74 percent
August – 45 percent
September – 72 percent
October – 112 percent
November – 118 percent
December – 108 percent
10 Best Internet Debuts of 1999
1. FreeMarkets (Dec. 10), 483 percent
2. Cobalt Networks (Nov. 5), 482 percent
3. MarketWatch.com (Jan. 15), 474 percent
4. Akamai Technologies (Oct. 29), 458 percent
5. CacheFlow (Nov. 19), 427 percent
6. Sycamore Networks (Oct. 22), 386 percent
7. Ask Jeeves (July 1), 364 percent
8. priceline.com (March 30), 331 percent
9. Calico Commerce (Oct. 7), 300 percent
10. Preview Systems (Dec. 8), 299 percent
10 Worst Internet Debuts of 1999
1. Cobalt Group (Aug. 5), -24 percent
2. MotherNature.com (Dec. 10), -21 percent
3. US SEARCH.com Corp. (June 25), -19 percent
4. BigStar Entertainment (Aug. 3), -18 percent
5. Webstakes.com (Sept. 24), -18 percent
6. ZapMe! (Oct. 20), -14 percent
7. Quotesmith.com (Aug. 3), -14 percent
8. 1-800-FLOWERS.COM (Aug. 3), -13 percent
9. Digital Lava (Feb. 17), -13 percent
10. ZipLink (May 26), -12 percent
Here are the Internet IPOs from December and their first-day
performances:
Dec. 2 – The Knot (KNOT),
50 percent
Dec. 2 – PFSWeb (PFSW),
160 percent
Dec. 7 – HealthCentral (HCEN),
-10 percent
Dec. 7 – Harris Interactive (HPOL),
43 percent
Dec. 7 – E-Cruiter.com (ECRU),
43 percent
Dec. 8 – Preview Systems (PRVW),
299 percent
Dec. 8 – NetRatings (NTRT),
65 percent
Dec. 8 – Andover.Net (ANDN),
252 percent
Dec. 8 – AGENCY.COM (ACOM),
192 percent
Dec. 9 – Fogdog (FOGD),
19 percent
Dec. 10 – eBenX (EBNX),
124 percent
Dec. 10 – MotherNature.com (MTHR),
-21 percent
Dec. 10 – FreeMarkets (FMKT),
483 percent
Dec. 10 – El Sitio (LCTO),
108 percent
Dec. 10 – eSpeed (ESPD),
100 percent
Dec. 15 – eCollege.com (ECLG),
30 percent
Dec. 15 – Optio Software (OPTO),
63 percent
Dec. 16 – Xpedior (XPDR),
37 percent
Dec. 17 – OnDisplay (ONDS),
175 percent
Dec. 17 – Egreetings (EGRT),
6 percent
Dec. 17 – C-bridge Internet Solutions (CBIS),
150 percent
Dec. 21 – Streamedia Communications (SMILU),
6 percent
