In IPO lingo, analysts will often refer to the concept of “window.” No,
this does not involve Microsoft technology. Rather, it is an indication
of the fickleness of the IPO market. That is, within a very short time, a
market space can get suddenly hot and then suddenly cold.
This week, we may see the window close on etailing IPOs. Two such
companies plan to take their companies to the public markets: Pets.com and
Buy.com.
Buy.com wants to sell you virtually anything. However, the company has
taken a deep-discount approach. In other words, the company is losing
tons of money. Despite being founded in 1996, the company is still
sporting negative gross margins.
Last year, the company posted revenues of $597.8 million and had losses
of $128.6 million.
Unfortunately, the company has been subject to much controversy. Its
CEO and founder, Scott Blum was apparently forced out (but he still owns more than
50 percent of the company).
The lead underwriter is Merrill Lynch and the proposed ticker symbol is
BUYC. The price range is $10-$12.
No doubt, the next company, Pets.com, wants to sell you stuff for you
littler critters. But so far, the company is showing losses. In the fourth quarter, sales were only $5 million, yet losses were $42 million. One bright fact about the company is Amazon.com Inc. holds a 43 percent stake.
The lead underwriter is Merrill Lynch and the proposed ticker symbol is
IPET. The price range is $9-$11.
The more promising IPOs include the following:
- Organic: Yes, this is kind of a funky name, but the company has a
roster of more than 250 clients (many of which are Fortune 500). Organic is a
leading
Net consulting firm. The marketing powerhouse firm of Omnicom owns 27
percent of Organic. The lead underwriter is Goldman Sachs and the
proposed ticker symbol is OGNC. - Lante: This is also a leading Net consulting firm. The company has
such big name clients as Microsoft. The lead underwriter is CS First Boston
and the proposed ticker symbol is LNTE. The Price range is $10-$12. - Chordiant Software: This company is a developer of ultra-sophisticated
software that allows for managing e-commerce, email, and traditional
components of a business, such as the call center. This market has been
hot and expect the IPO to follow suit. Interestingly enough, 80 percent of
the companys sales come from overseas. The lead underwriter is Robertston
Stephens and the proposed ticker symbol is CHRD. The price range is
$10-$12. - WebMethods: Actually, this might be the hottest IPO for the week.
The company develops software solutions for XML (extensible markup
language).
XML is rapidly becoming the standard language for business-to-business
applications. The lead underwriter is Morgan Stanley and the proposed
ticker symbol is WEBM. The price range is $11-$13.
