Stocks Slump 4, ‘Net IPOs 0

Maybe they hadn’t heard the news in the Far East. That could explain why
Internet Initiative Japan decided to go public on Wednesday, one day
after the worst beating of the year – and perhaps the worst day ever –
for Internet IPOs.

But the bold – some would say foolhardy – move may pay off. After
opening at $23.75, barely above the $23 offer price, shares of (IIJI) shot up to $28.

No such surge greeted the four Internet IPOs that debuted Tuesday. They
never had a chance in the face of a continuing market selloff that has
driven dozens of Internet share values south. The numbers tell the
story:

Here’s some perspective: Through July, there were 138 Internet IPOs this
year, of which four closed at 10% or more below the offer price. That
amount was equaled in just a few nasty, short and brutish trading hours
Tuesday.

Things haven’t gotten any better so far Wednesday for three of the four.
By 12:45 p.m., online video products e-tailer BigStar was at $7.38,
insurance quote Web site Quotesmith.com was at $9.38, and
1-800-FLOWERS.COM was at $17.56. Splitrock, meanwhile, had scratched its
way up to $9.88.

Based in Tokyo, IIJ provides Internet access and services for large
corporations. The company is raising $151 million. Fun fact (if anything can be fun these days): There
are 12 underwriters for this offering, with Goldman Sachs leading.

The vast majority of IIJ’s revenues (80%) come from providing Internet
access. The company leases lines from telcos in Japan and the United
States. Major competitors include PSINet, AT&T and Japan Telecom.

Revenues for the year ended in March were $124 million, 34% above the
previous year. Losses increased, however, to $12 million from $2.7 million.

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