In the wake of Tuesday’s huge sell-off, the most Internet IPOs ever to
debut in one day began trading Wednesday.
And while two of the five Internet stocks opened fairly strongly, none
appear positioned to have the kind of first-day splash that eToys had
Spanish language portal StarMedia Network (STRM) quickly climbed to
$25.63, a healthy 71% above its $15 offer price.
Online broker DLJdirect (DIR), meanwhile, opened at $26.38, a 32%
increase over its $20 offer price.
But the other three — ISP Juno Online Services (JWEB), uber ISP Ziplink
(ZIPL) and SEC research database EDGAR Online (EDGR) – stumbled out of
the starting gate, trading at or slightly below their respective offer
Though based in New York, StarMedia’s primary market is south of the
border. The company runs the most-popular Spanish language Web portal in
Latin America. Investors include online auctioneer eBay and e-mail
services outsourcer Critical Path.
Like its English-language counterparts such as Yahoo!, Lycos and Excite,
StarMedia offers visitors content organized in “channels,” as well as
search capabilities, free e-mail and online shopping.
The company had $5.3 million in revenue in 1998, against $45.9 million
in net losses.
The slew of ‘Net stock debuts comes one day after this week’s most
prominent Internet IPO, that of online bookseller barnesandnoble.com.
Though it raised $450 million in its offering, the online bookseller
closed trading Tuesday at $22.94, a rather ordinary (by Internet
standards) 22.5% above its $18 offer price.
Many market watchers expected that barnesandnoble.com’s high brand
recognition, like that of eToys last week, would serve as fuel for its
However, BNBN shares were held down by a number of forces, not the least
of which was poor timing. Last fall, when the online division of Barnes
& Noble originally filed for its IPO (only to cancel soon after when
German media giant Bertelsmann bought a 50% stake from the retail
bookseller), it was seen as a legitimate potential threat to Amazon.com.
Since then, however, Amazon.com has transcended the category of mere
book, video and music e-tailer, adding a number of product lines and
features, including auction services, pet supplies and pharmaceuticals
in its bid to become the Walmart of cyberspace. With Q1 revenues of $294
million, Amazon.com is doing nearly 10 times as much business as
barnesandnoble.com (which had $32 million in Q1 sales).
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