Getting A Caffeine Fix

Last week, the mighty Starbucks
announced its quarterly results. Even with a slowing economy,
people are still buying high-priced coffee. In the past quarter, net
earnings surged from $34.7 million to $49 million. In fact, the company
raised guidance for 2001.

In all, the company operates 3,800 coffee shops. For 2001, Starbucks plans
to establish 1,100 more.

Actually, it was a good week for coffee companies, as
Peet’s Coffee decided to
hit the IPO markets. The company sold 2.5 million shares, raising $20
million. The lead underwriter was WR Hambrecht, which uses OpenIPO, the
new-fangled online auction system to fund IPOs.

On the first day of trading, the stock rose 17.2% to $9.38. However, there
were some warning signs. For example, the offering range was reduced from
$10-$14 to $8-$12, with the IPO being priced ultimately at $8. The market
cap is about $74 million.

Basically, the company is a niche player. There are only 58 stores and 80%
of revenues come from California. Unfortunately, over the long-term, niche
restaurant IPOs usually do not perform well.

The other IPO for last week was Align Technology . The
company is the developer of the so-called “Invisalign” system, which are
clear, removable orthodontic devices (essentially, to correct misaligned

The price range was $14-$16. The offering price? It was at $13. Although,
the stock increased to $17.31 on its first day of trading. The company
attained an impressive market cap of $805 million.

The company is definitely early stage. For the first nine months of 2000,
losses were $53.3 million and revenues were a mere $3.2 million.

Upcoming IPOs

Yet again, this week will also be light for the IPO market. With California
strapped for energy, investors may have interest in the
ATP Oil & Gas IPO.
The company is a oil producer in the outer continental shelf of the Gulf of
Mexico (the company has recently acquired properties in the Southern Gas
Basin of the UK).

According to Inc. Magazine, the company was rated as the 21st fastest
private company in the U.S. and the fastest for energy companies. For the
first nine months of 2000, the company had sales of $59.3 million. But
losses were $4.3 million.

A good sign is that the underwriter increased the price range from $14-$17
to $15-$18. The lead underwriter is Lehman Brothers and the proposed ticker
symbol is ATPG.

Exact plans to go
public. This is a biotech company that is at the nascent stage. The
company has ten patents for the detection of colorectal cancer. This is the
most deadly form of cancer for non-smokers. Yet, if detected early, the
disease can be treated effectively.

For the first nine months of 2000, revenues were $3.8 million and losses
were $6.8 million. The company plans to issue 4 million shares at the price
range of $14-$16. The lead underwriter is Merrill Lynch and the proposed
ticker symbol is EXAS.

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