The trend continues – IPO investors want strong, profitable companies. Period.
This was evidenced by last week’s IPO of KPMG
. It was a mega offering, as the company raised about $2.02 billion.
The IPO was priced at $18 and ended its first day of trading at $23.48. The
company is a leading consulting firm for the Global 2000 companies. As of
2000, revenues were about $2.37 billion and profits were $679.4 million.
Now, there were two other IPOs last week. Unfortunatley, they paled in
comparison.
There was Oil States International . The company develops
specialty products for the oil and gas industry. For the first nine months
of 2000, revenues were $437.4 million and profits were $18.6 million.
Although, the company’s financials have been eratic over the years.
In order to launch the IPO, the company’s investment bankers had to do some
legwork. The offering price was at $9, which was well below the $11-$13
price range. In all, the company raised about $90 million.
On the opening, the stock increased a minuscule 2 cents and ended its first
day of trading up 15 cents.
There was a biotech IPO that hit the markets: Third Wave Technologies
. But it certainly didn’t generate any waves.
The company develops testing systems for early detection of cancer. For
2000, the company had revenues of $11.4 million and losses of $53.7 million.
The IPO was priced at $11, which was on the low end of the $11-$13 price
range. The company raised about $102 million.
The IPO opened up 25 cents and closed trading up 6 cents.
Upcoming Week’s IPOs
OMP
plans to go public this week. The company is a distributor of a product
called Obagi Nu-Derm, which helps to slow-down the aging process for skin.
Revenues have been running strong, going from $16.2 million in the first
nine months of 1999 to $25 million in the same period in 2000.
The price range is $11-$13 and the company expects to issue 4.5 million
shares (the price range had been reduced from $14-$16). The lead
underwriter is CIBC World Markets and the proposed ticker symbol is OMPI.
What else to look forward to this week? Keep an eye on
River Networks.
The company is a developer of sophisticated routers for Internet Service
Providers (ISPs), like British Telecom and Earthlink Networks. It helps
with such things as bandwidth management and quality of service. While the
company had revenues of $23 million, losses were $37 million in 2000.
But the recent fall in Nasdaq – concentrated mostly in the tech issues –
will definitely put downward pressure on this IPO.
The lead underwriter is Morgan Stanley and the price range is $11-$13 (the
company plans to issue 10 million shares). The proposed ticker symbol is
RSTN.
