Even with a wayward Nasdaq, the IPO market posted impressive numbers last
week. There were 28 IPOs, raising about $2.5 billion. Actually, the big
winners were biotechs.
As for high-tech, it was a rough week. But this may present opportunities
for investors. An interesting play is EXE
For whatever reason, this company has lousy timing. For example, it tried
to go public several years ago, but had to withdraw its offering because of
adverse market conditions.
As for its IPO last week, the stock advanced a mere 1/8 to 8-1/8 (it stayed
at the price at the end of last week). The lead underwriter was Donaldson,
Lufkin & Jenrette and market capitalization is approximately $333 million.
The company is a developer of high-end software that helps e-commerce
providers with fulfillment, warehousing and distribution.
Interestingly enough, EXE focuses on traditional brick-and-mortar companies
that are transitioning online. Customers include Kmart, Ford and Safeway.
However, EXE has been going through a turnaround itself, transitioning
itself from mainframe software to Internet applications. As a result, the
company’s revenues have shown meager growth. But this should change
quickly. After all, the company has been able to sign major distribution
deals, such as with IBM, Microsoft, Oracle and PricewaterhouseCoopers.
Another IPO worth looking at is Virage
. The company designs specialized integrated
microchips. Known as embedded memory designs, Virage allows for “systems on
a chip” that make it possible for such things as Internet capabilities.
The company has snagged big time customers. They include Broadcom, IBM,
National Semiconductor and Conexant.
These customers have been translating into financial success. In the first
half of 2000, the company generated $8.8 million in revenues, which was a
153 percent increase from the same period a year ago. The company is also
The market is growing at a rapid rate. In 1999, it was $6.7 billion. By
2004, it is expected to surge to $32.9 billion.
Although, the IPO was muted. The IPO was priced at $12, raising about $45
million. By the end of last week, the stock was unchanged.