After sprinting into the mid-summer holiday weekend, the Internet IPO
market should ease up this week, as only eight Net companies are
tentatively scheduled to begin selling stock.
And since there always are
a few companies that don’t make it out (indeed, four of the eight on
this week’s roster are holdovers), we could see five or fewer Internet
companies hit the street by Friday.
None of this week’s expected entrants are household names, but as the
recent torrid debut performances of companies such as Ask Jeeves,
Commerce One and Ariba demonstrate, you don’t have to be an Amazon.com
or eBay to rocket on the first day of trading. Here are three that hope
to take the next ride:
- Liquid Audio (Nasdaq: LQID), a maker of software that allows consumers
to download digital-format songs from the Internet. But the Redwood
City, Calif., company’s target markets are record labels, Web sites and
artists; 99 percent of its revenues come from software licensing fees and
business development deals, though the company has begun heavier
promotion of its digital delivery services. Liquid Audio and lead
underwriter Lehman Brothers are offering 3.6 million shares in a
proposed price range of $10-$12.The company’s main selling point — its secure digital format avoids the
piracy problems associated with the MP3 format — could make many
investors overlook accumulated debt of $20.2 million through March and
warning in S-1 filing that “we expect to continue to incur losses and
negative cash flows through at least 2002.” - HealthGate Data (HGAT), a medical content provider targeting
healthcare professionals. Company’s revenue ($2.4 million in ’98) comes
from a mix of service fees, online advertising and e-commerce. While ’98
sales doubled the ’97 total, Q1 sales of $615,000 were below the
$626,000 from the year-ago quarter. Besides healthcare information
systems giants such as McKesson HBOC, HealthGate faces formidable
competition online from WebMD and drkoop.com. Based in Burlington,
Mass., the company hopes to raise $50.6 million in an offering of 4.6
million shares with a pricing range of $10-$12. Lead underwriter is SG
Cowen. - Travelscape.com (RSVN), another contender in the crowded field of
companies offering online travel-related services such as airline
tickets, hotel rooms and air/hotel packages. The company cuts deals with
major airlines and hotel chains, including Marriott, Hilton and
Doubletree, as well as hotels in its hometown of Las Vegas.Travelscape.com had $20.9 million in sales last year, along with a net
loss of $4.4 million. Among its many competitors are priceline.com and
Preview Travel. Travelscape.com is offering 5 million shares in the
$10-$12 price range. U.S. Bancorp Piper Jaffrey is lead underwriter.
