AT&T Poses As Tracking Stock

AT&T always had the reputation for being solid, dependable and status quo.


The
reception to the AT&T Wireless (AWE) IPO was also spectacularly sober.

Shares
were priced at $29.50 and ended the day at $31.68a respectable 7.4 percent rise.

It
ended the week virtually unchanged.

Why was the largest IPO in U.S. history so lackluster?

One reason was that is was so big360 million shares. This is not like the
3-5 million shares of recent IPO’s, a small number that helps boosts price.

Another reason: This was a “tracking stock.” This special type of
stock gives you an economic interest in the company, but no ownership
rights.


(You could own all the company’s tracking stock and still not own it.) In
other words, AT&T retains control over the assets of AT&T Wireless. It is
not
a spinoff.


A recent study released by the Tipple College of Business at the University
of
Iowa found that in the subsequent three years following the release of a
tracking stock that they generally underperform the market.


And finally, there is national competition in the wireless field. There is
the partnership of Bell Atlantic and Vodafone AirTouch into Verizon
Wireless,
and the new joint venture between SBC Communications and BellSouth.


The AT&T Wireless IPO was headed by Goldman Sachs, Merrill Lynch and
Citigroup.


Headquartered in Redmond, Wash., Metawave Communications (MTWV) is also a
wireless company. On Thursday, Metawave closed at 13 9/16, up 50 percent
over
its $9 price. In the dismal IPO market, this was definitely a tremendous
performance. The company raised $56 million.


The company makes software-driven antennae that increase analog and digital
network capacity thereby avoiding costly investment in additional cell
sites.


Their smart antenna systems are found in North America, South America,
Europe
and Asia.


Merrill Lynch was the lead underwriter.


They say timing is everything, and for Software Technologies (STCS), they
picked a day (Friday) that the Nasdaq was rising. They opened at $12 and
went
up nearly 50 percent to 17 7/8.


It was only on April 20 that this IPO was
labeled as delayed indefinitely due to market conditions.


The Monrovia, Calif.-based company is a provider of e-Business integration
software that controls information over various configuration platforms and
applications within and among global enterprises. The company raised $48
million.


Morgan Stanley Dean Witter was the lead underwriter.


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