With high-tech issues getting pounded last week, IPOs were also affected.
There were a mere eight IPOs last week. And those that did not launch last
week will make another try this week.
Although, it is always worth focusing on IPOs that have the ability to
launch in the midst of adverse market conditions. It is definitely a sign
One such company is New Power
. In fact, the company was able to raise a staggering $504
million. Then again, the company is a division of Enron, which is a
fast-growing energy broker.
On its first day of trading, the stock was up about 28 percent to $27,
giving the company a tidy market cap of $3 billion. Enron now owns 46
percent. Other investors include DLJ and GE Capital Equity Investments.
Traditionally, the utility industry has been local – primarily because of
complex regulations. However, there has been tumultuous change in the
industry. As for New Power, it wants to become the first national utility.
True, this is extremely ambitious. But so far, New Power has done a great
job. In fact, a big part of the strategy is, of course, the Internet. To
this end, New Power struck a key deal with AOL.
Next, Advanced Switching
had a successful IPO. The IPO was
priced at $15, raising $93 million. At the end of its first day of trading,
the stock ended at $18.
Basically, the company develops technologies that enhance the speed of weak
points in the telecom network. In other words, the company marries fiber
optics and copper phone lines.
The company is ramping-up revenues. In the first six months of 2000,
revenues were $12.93 million, which was up from $402,000 from the same
period a year ago.
But there are definite risks. The competition is intense and the customer
base is concentrated. The company also has a legal cloud, as it is involved
with a lawsuit with Nortel regarding a patent.