ISDEX Drops But New IPOs Rock

Internet stocks drop as a group with a few individual gainers in the mix as ISDEX falls 1.69% to 551.07 today. The move caps off a week of mostly positive sentiment for the sector, especially with new IPOs.

  • Microsoft (NASDAQ:MSFT) may spin off its Internet holdings into a tracking stock in what I predict could be the largest Internet IPO event in history. Taking into account MSN, Hotmail, Expedia, CarPoint, Explorer, Server software, etc. I would value this at a minimum $30 billion to $40 billion market capitalization event, possible more. That’s my estimated (and very aggressive) 35x to 50x revenue multiple.
  • Audible (NASDAQ:ADBL) goes public today with 4 million shares at $9 each, opens at $15 1/4, peaks at $25 and closes at $21, up 133%. The firm provides Web-based audio services such as audio books, magazines and newspapers that Net users can download.
  • Red Hat, one of the few firms to embody open source Linux as a commercial success (so far anyway), files to go public. Goal: 6 million shares at $11 target. That’s 9% of the firm to be offered through Goldman, Weisel, H&Q and E*TRADE. I think this one could be a high flyer since Linux has started to get more credibility within large corporations as more than a geeky alternative operating system for networking.

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