Internet IPOs Take Post-Holiday Breather

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.

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