August’s Slow IPO Grind

It’s not surprising that the IPO market cooled off in August — it’s a
seasonal thing, and you can expect September also to be relatively
quiet.

The slowdown is more jarring this year, however, because we’ve become
accustomed to each succeeding month setting new records for Internet
IPOs. With 26 Internet IPOs in the month, August was well off the
all-time high of 36 in July and the next-best 32 in June.

But August did establish one new mark – the Internet IPOs launched last
month had the worst average first-day performance of any other group in
1999.

The August offerings closed their respective first days of trading at an
average of 45% above their offer prices. That’s a new low for the year,
edging out June’s 48% average. Eight of the August Internet IPOs ended
their debuts below their respective offer prices, with six landing on
the list of 10 worst opening days of 1999.

There were two moonshots, landing Red Hat (RHAT) (272%) and Quest Software (QSFT)
(236%) in the top 10 best debuts of the year. Throw out those two and
the rest of the August Internet IPOs posted an average gain of 27.7%
opening-day gain.

The real disasters – The Cobalt Group (CBLT) , BigStar Entertainment (BGST),
Quotesmith.com (QUOT) and 1-800-FLOWERS.COM (FLWS) – came early in the month, with
half of the 16 Internet IPOs through Aug. 11 losing ground.

Things got
better when the field thinned and the market rallied; the 10 ‘Net debuts
from Aug. 13 on averaged a first-day gain of 81%.

Let’s go to the scorecards:

Internet IPOs By Month

  • January – 4
  • February – 11
  • March – 13
  • April – 17
  • May – 26
  • June – 32
  • July – 35
  • August – 26

Total – 164

Average First-Day Return By Month In 1999

  • January – 241%
  • February – 122%
  • March – 134%
  • April – 116%
  • May – 59%
  • June – 48%
  • July – 74%
  • August – 45%

    10 Best Debuts of 1999

    1. CBS MarketWatch.com (Jan. 15) – 474%
    2. Ask Jeeves (July 1) – 364%
    3. priceline.com (March 30) – 331%
    4. Healtheon (Feb. 11) – 292%
    5. Ariba (June 23) – 291%
    6. eToys (May 20) – 283%
    7. Red Hat (Aug. 11) – 272%
    8. Log On America (April 22) – 250%
    9. Quest Software (Aug. 13) – 236%
    10. China.com (July 13) – 236%
  • 10 Worst Debuts of 1999

    1. The Cobalt Group (Aug. 5), -24%
    2. US SEARCH.com Corp. (June 25), -19%
    3. BigStar Entertainment (Aug. 3), -18%
    4. Quotesmith.com (Aug. 3), -14%
    5. 1-800-FLOWERS.COM (Aug. 3), -13%
    6. Digital Lava (Feb. 17), -13%
    7. ZipLink (May 26), -12%
    8. Juno Online Services (May 26), -11%
    9. Mortgage.com (Aug. 11), -11%
    10. Splitrock Services (Aug. 3), -10%

    The following are the Internet IPOs from August and their first-day
    performance (after the list are links to stories containing debut
    percentages for all other ‘Net IPOs this year):

    • Aug. 3 – Splitrock Services (SPLT), -10%
    • Aug. 3 – Quotesmith.com (QUOT), -14%
    • Aug. 3 – BigStar Entertainment (BGST), -18%
    • Aug. 3 – 1-800-FLOWERS.COM (FLWS), -13%
    • Aug. 4 – Internet Initiative Japan (IIJI), 36%
    • Aug. 5 – The Cobalt Group (CBLT), -24%
    • Aug. 5 – Internet Capital Group (ICGE), 104%
    • Aug. 5 – Interactive Pictures (IPIX), 6%
    • Aug. 5 – Homestore.com (HOMS), 14%
    • Aug. 6 – Internet Gold (IGLD), -0.5%
    • Aug. 10 – U.S. Interactive (USIX), 6%
    • Aug. 10 – InterWorld (INTW), 18%
    • Aug. 10 – HotJobs.com (HOTJ), -5%
    • Aug. 10 – Braun Consulting (BRNC), 1%
    • Aug. 11 – Red Hat (RHAT), 272%
    • Aug. 11 – Mortgage.com (MDCM), -11%
    • Aug. 13 – Active Software (ASWX), 27%
    • Aug. 13 – Quest Software (QSFT), 236%
    • Aug. 17 – SilverStream Software (SSSW), 97%
    • Aug. 19 – HeadHunter.NET (HHNT), 2%
    • Aug. 20 – MyPoints.com (MYPT), 38%
    • Aug. 20 – LookSmart (LOOK), 44%
    • Aug. 20 – Lionbridge Technologies (LIOX), 26%
    • Aug. 20 – Agile Software (AGIL), 90%
    • Aug. 26 – bamboo.com (BAMB), 151%
    • Aug. 26 – ImageX.com (IMGX), 99%

    July
    IPO debuts

    June
    IPO debuts

    May
    IPO debuts

    January-AprilIPO debuts

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