Internet IPOs Run From Lows

Anybody who would have bought an Internet IPO in this table shown at the low would be up at least 13%. Some would have enjoyed as much as a 303% pop from the depths.

As a group these stocks gained a blended 94% off their lows and as of yesterday’s close were off the highs by 28%.

Through April 22 the top runner was up 775% from its initial public offering. Stats:





































































































































































Company

Stock

Shares

IPO share

4/22 change from

High %

Low %

name

Symbol

sold

price

IPO

vs. IPO

vs. IPO

 

 

 

 

 

 

 

VerticalNet

VERT

3.50

$ 16.00

775%

831%

117%

Pacific Internet

PCNTF

3.00

$ 17.00

324%

513%

54%

WebTrends

WEBT

3.50

$ 13.00

341%

546%

69%

Healtheon

HLTH

5.00

$ 8.00

538%

672%

172%

Vignette

VIGN

4.00

$ 19.00

353%

488%

96%

Allaire

ALLR

2.50

$ 20.00

223%

278%

70%

Prodigy

PRGY

8.00

$ 15.00

107%

238%

33%

iVillage

IVIL

3.65

$ 24.00

296%

442%

168%

MiningCo

MINE

3.00

$ 25.00

162%

300%

86%

Autoweb

AWEB

5.00

$ 14.00

88%

257%

40%

MarketWatch

MKTW

2.75

$ 17.00

323%

665%

229%

OneMain

ONEM

8.50

$ 22.00

28%

113%

14%

 

TOTAL

52.40

210.00

276%

421%

94%

 

AVERAGE

4.37

17.50

276%

421%

94%

 

MEDIAN

3.58

17.00

282%

441%

77%

The biggest surprise in the bunch to me is VerticalNet (NASDAQ:VERT) which hovers 9 points off its all-time high. The industrial community (vertical) Web site service reported $1.9 million in revenue for first quarter ending March 31, up 412% vs. 1Q98. Net loss was $5.6 million vs. $5.3 million net loss for 1Q98.

The surprise isn’t in the results but in how investors have driven this stock to a $2.35 billion market cap. That’s 309x annualized revenue. On a generous $20 million sales estimate for 2000
the multiple is over 100x.

I think two things could be at play here: 1) investor’s genuine enthusiasm for business-to-business Internet stocks; 2) but I also believe investors may be confusing the B-2-B opportunity (which is huge) with one company’s potential (which is perhaps bigbutnot yet).

One stock I find more encouraging at these levels and more pleasantly surprising could be Healtheon (NASDAQ:HLTH). In my pre-IPO analysis I was bearish on this stock for one plain reason, the healthcare system in the U.S. is very unwired. The path forward I mentioned for Healtheon at that time was in acting as a roll-up magnet.

Go public, get aggressive and acquire the missing pieces to grow a strong Web presence and Internet-based information and commerce system.

Healtheon announced a $460 million stock swap for healthcare transaction software firm MEDE (NASDAQ:MEDE). The irony is Healtheon first delayed its IPO last year and debuted this year at $8 per share. At $51 Healtheon looks undervalued to me with its new public leverage just starting. Its next step ought to be to acquire Drugstore.com perhaps.

question of the
day:

will the market for Internet IPOs stay hot?

email "yes"or
"no"
in subject header

results next week in emailbag monday!

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