Healtheon priced its IPO range between $6 and $8 per share as the market
itself seems to be undergoing its own erratic heartbeat, sweaty palms and
clammy foreheads, all being banged against Wall Street’s public issue
pipeline.
Our analysis estimates that fully-diluted shares outstanding Healtheon may
be seeking a $565 million initial public market capitalization or what we
think could be 14x this year’s or 10x next year’s revenue.
The Web-based healthcare “platform” — a Web-based network aimed at the
healthcare industry–has 20 million warrants and options that dilute
investors once exercised. Healtheon is the second “big” Internet firm that
founder Jim “Netscape” Clark spun together.
Some of the risks: the space is intensely competitive and has just four
customers, which include huge pharmaceuticals, that account for more than
90% of Healtheon’s revenue. Prognosis: Healtheon may have to roll up as
many quality healthcare sites on the Web as possible to create some
“patient” interest to complement its medical industry-heavy nature, while
also acquiring heavy-lifting healthcare network services. Whether Healtheon
sprints or sputters its first day remains up to Wall Street’s pulse.
Internet.com’s IPO Index heard the beat grow fainter the past week as it
lost 12% since September 24, in a “what do you do for an encore” look at
some of the IPO stars.
Among the decliners: everybody’s favorite commune hangout GeoCities
(NASDAQ:GCTY) fell the most and hardest, down 21.5%. GCTY is just 26.5%
above its IPO price August 11.
INTERNET.COM’S | Ticker | Share price | Share price | % change | % change |
IPO INDEX | symbol | 10/01/98 | 9/24/98 | week | from IPO |
Cyberian | COOL | $10.13 | $7.81 | 29.6% | -43.8% |
ISS | ISSX | $29.75 | $26.75 | 11.2% | 35.2% |
Verisign | VRSN | $27.63 | $27.50 | 0.5% | 97.3% |
Digital | DRIV | $7.88 | $8.13 | -3.1% | -7.4% |
DoubleClick | DCLK | $20.38 | $22.25 | -8.4% | 19.9% |
Inktomi | INKT | $66.94 | $76.00 | -11.9% | 271.9% |
24/7 | TFSM | $10.38 | $11.88 | -12.6% | -25.9% |
CDnow | CDNW | $8.00 | $9.38 | -14.7% | -50.0% |
ebay | EBAY | $40.00 | $47.38 | -15.6% | 122.2% |
Broadcast.com | BCST | $42.63 | $50.50 | -15.6% | 136.8% |
Exodus | EXDS | $23.06 | $27.38 | -15.8% | 53.8% |
Broadcom | BRCM | $65.75 | $81.69 | -19.5% | 174.0% |
Netgravity | NETG | $10.69 | $13.50 | -20.8% | 18.8% |
GeoCities | GCTY | $21.50 | $27.38 | -21.5% | 26.5% |
TOTAL | 384.69 | 437.50 | -12% | 91% | |
AVERAGE | 27.48 | 31.25 | -12% | 91% | |
| (c) 1998 Mecklermedia (NASDAQ:MECK) – Internet.com | |||||
Netgravity (NASDAQ:NETG), came in with the second-worst fall, down 20.8%.
While higher, and not falling as far, ad-network service DoubleClick
(NASDAQ:DCLK) also seems to be in the same run
space since its IPO as NETG. Both are in that 20% range from IPO price.
Cable set-top chip king Broadcom (NASDAQ:BRCM) also was found at the bottom
of the bunch with a 19.5% drop from September 24. Putting the pressure on
BRCM, a favorite so far with a 174% run from IPO, is a secondary offering
where some of the original investors sell shares. Broadcom itself will sell
392,000 of a 3 million share secondary with Intel and Scientific-Atlanta
shedding about a million shares between them.
Meanwhile, two co-founders, CEO Henry Nicholas and CTO Henry Samueli, will
sell 900,000 shares or 450,000 each. News on October 1 that
Scientific-Atlanta would buy chips from Broadcom for 500,000 cable set-top
boxes didn’t get Wall Street’s attention as much as the planned secondary.
Of the top Internet.com IPO Index performers during the past week, Cyberian
Outpost (NASDAQ:COOL) came in from the cold with a 29.6% jump since
September 24.
The heat was courtesy of Cyberian’s record revenue for its fiscal second
quarter ending August 31, up 270% to $17 million vs. 2Q97. Net loss
increased to $5.6 million vs. net loss of $838,000 for the same period last
year.
ISS Group (NASDAQ:ISSX) announced September 28 its SAFEsuite Decisions,
which automates the collection, integration, analysis and reporting of
enterprise-wide security information. Both COOL and ISSX haven’t been in
favor in Internet stocks, so the bump up for both may have been overdue.
With the market’s irregular heartbeat of late, look for the half dozen
firms in the IPO “green room,” to be waiting with more than bated breath to
go public.
Overall, from our experience with Internet IPOs, even if they come out on
the low end of pricing they’re out.
That means capital and stock to go hunting with, something being private is
extremely difficult to do.
Example: even though Infoseek (NASDAQ:SEEK) was the runt of the search
engine litter, and last to go IPO in 1996, it went. How many of the dozens
of other search engines that existed in 1994-96 never saw light of day via
IPO matter? Once public even runts can get healthy on.
a free service of Internet.com |
Internet
Investment Symposium ’98, Oct 8-9 @ Fall Internet World!
“The
power conference to network with industry influencers and decision makers.”
– Yahoo co-founder Jerry Yang
Click the above link now and get
this year’s power lineup.
Disclaimer: Neither Mecklermedia nor Steve Harmon makes specific trading recommendations or gives individualized market advice. Information contained in the Internet Daily Stock Report is provided as an information service only. Mecklermedia recommends that you get personal advice from an investment professional before buying or selling stocks or other securities. The securities markets are highly speculative areas for investments and only you can determine what level of risk is appropriate for you. Also, users should be aware that Mecklermedia, its employees and affiliates may own securities that are the subject of reports, reviews or analysis in the Internet Daily Stock Report.
Although Mecklermedia obtains the information reported herein from sources that it deems reliable, no warranty can be given as to the accuracy or completeness of any of the information provided or as to the results obtained by individuals using such information. Each user shall be responsible for the risks of their own investment activities and, in no event, shall Mecklermedia or its employees, agents or affiliates, be liable for any direct, indirect, actual, special or consequential damages resulting from the use of the information provided.
