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All in the timing for 'Net IPOs
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November 23, 1998: 10:44 a.m. ET
Debut delays helped Computer Literacy, theglobe.com surprise the market
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NEW YORK (CNNfn) - Timing is everything, especially when it comes to scheduling a stock debut. Initial public offerings that were mere benchwarmers a few months ago have rocketed into the ranks of key market players, and there are talented rookies suiting up in the bullpen.
Proof of the power of timing is Computer Literacy (CMPL), which put its deal on hold a few weeks ago due to the ubiquitous "market conditions" before surprising Wall Street with an unexpected play last week.
Not only did the once-marginal deal price 25 percent above its earlier offering price of $7.50, it ended its first active day with a 99 percent gain at just under $20 per share.
"The irony of this stock is that you couldn't give it away before," said James M. Glickenhaus, who looked at the deal for his investment firm Glickenhaus & Co. "But the Internet is the It-girl of the month."
Still, investors should be aware of the fine print behind the stunning opening-day statistics. Computer Literacy's offering opened at $21, meaning all of the gains made went to those lucky enough to get in on the ground floor.
Meanwhile, another recent deal that left many investors with holes in their pockets was theglobe.com (TGLO), which opened at $59 but is now trading in the mid-$40s.
CitySearch could be hot ticket
Among the first of the Internet newcomers slated to price between now and the middle of December is Ticketmaster-CitySearch. NationsBanc Montgomery Securities, which also took Computer Literacy public, will underwrite the deal.
The offering of 7 million shares between $8 to $10 raising $80.5 million, is less ambitious than the original plan to raise $92 million. The deal gives the company, which made $15.4 million in sales last year, a prospective $624 million in market capitalization. At 40 times sales, that's actually quite conservative relative to the dumbfounding multiples many online companies have achieved.
The company, which intends to run its business under the name CitySearch, hopes to be the global destination for local city guides, local advertising and live event ticketing.
Industry insiders point toward Ticketmaster's presence in 43 states, Canada and the United Kingdom as a key factor in CitySearch's plans to roll out a national and international network of city-specific Web sites.
Among the two companies, Ticketmaster Online generates slightly more revenue. For the nine months ending September, it had sales of $14.2 million, up 145 percent from the same period a year ago.
Sales are growing apace at CitySearch as well as nine-month revenues surged 209 percent to $11.3 million. But as quickly as its sales are soaring, so too are the number of direct competitors the company faces. Entrenched rivals already include America Online's (AOL) wholly-owned company Digital City, Microsoft's (MSFT) Sidewalk, Excite's (XCIT) City.Net and Lycos' (LCOS) City Guide.
Xoom, Ubid and Infospace
Elsewhere online, Web-based direct marketer Xoom.com is closing in on a launch date. Last week, the company added Deutsche Bank Securities as a co-manager along with Bear Stearns, the banker behind theglobe.com.
The site attracts members by offering chat rooms, e-mail, clip art and other community-gathering attractions, a strategy which seems to be working. The site was the second-fastest growing on the Web in the first half of this year, two rankings above theglobe.com, and, with 4.5 million members, the 13th most trafficked site in September.
Other upcoming Net deals certain to grab attention include online auction house uBid, expected to price a modest 1.5 million shares between $13 to $14. From its first month of business in December 1997 through the nine months leading up to September, uBid registered 120,000 users, 21,000 were picked up in the month of September alone.
Even though much larger rival eBay (EBAY) saw its registered user base balloon to 1.2 million during the same nine-month period, the Ubid deal is already seeing favorable scrutiny. Underwriter Merrill Lynch recently raised its initial filing price by $1.
On the downside, Internet portal Infospace.com, also considered a potentially hot deal, trimmed the size of its $9-to-$11 offering by 1 million shares to 4 million. 
-- by staff writer Bambi Francisco
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