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Little but Nets in IPO pipe
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April 4, 1999: 5:39 p.m. ET
Flood of Internet providers and related offerings set to go public this week
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NEW YORK (CNNfn) - In the initial offering market, the gnawing schism between the Internet in-crowd and the rest of the U.S. economy looks set to widen this week, with only two new non-networking faces daring to run the Wall Street gauntlet.
The first of these non-Web hopefuls is polymer decking manufacturer Trex, which markets a wood/plastic composite alternative to lumber for outdoor use. The non-wood market has grown dramatically with fluctuations in the price of forestry products, swelling to 97 percent of decking sales in recent years.
Since Trex products use recycled wood fibers that otherwise would go to waste, the company's $48 million IPO could see an additional boost from "green funds" and other environmentally conscious investors. Underwriter Schroder & Co. plans to put 1.25 million shares on the block some time this week under the ticker symbol "TWP," priced to sell between $13 and $15 per share.
Semiconductor equipment maker PLX Technology has a harder hill to climb this week. The company has to fight not only Wall Street's seeming blindness to any initial offering that isn't named after a Web address, but the grim example of fellow chip-equipper MKS Industries (MKSI), which went public last week and is now trading below its starting levels.
However, head underwriter Merrill Lynch hopes PLX's emphasis on chips for embedded systems will get investors' attention. Embedded systems -- small computers that perform preset functions -- are a growing segment of the computing market as manufacturers continue to incorporate them into consumer products.
PLX is set to price 3.3 million shares between $8 and $9 under the ticker symbol "PLXT."
A number of one-time IPO hopefuls also are re-entering the pipeline this week for what they hope will be their final approach. These companies include fossil fuels trust Hugoton Royalty, plastic manufacturer International Smart Sourcing and biotech Careside.
Still, in the face of Pepsi Bottling's (PBG) massive disappointment last week, it is uncertain whether these offerings actually will come to market this week. The beverage distributor's float of 100 million shares, the fifth-biggest IPO of all time, broke Wednesday, sinking well below starting levels. After opening at $23, the stock is now down 1-1/4 at 21-3/4, indicating a 5 percent loss.
Nets can do no wrong
On the other hand, the Internet hopefuls look set to continue their pattern of dramatic opening surges. Two delayed offerings from last week, USInternetworking and Log On America, are jostling three specialized e-commerce companies and two networking firms in the race to become Wall Street's next e-darlings.
If the triumphant debut of woman-oriented iVillage (IVIL) is any indication, iTurf, which caters to an adolescent demographic, will immediately capture both the interest and the wallets of investors. The company is set to price 3.7 million "TURF" shares between $10 and $12 Tuesday.
In particular, iTurf's e-commerce relationship with Internet retail buzzword dELiA*s (DLIA) is likely to help push the company onto center stage, while underwriter BT Alex. Brown hopes wired investors will remain forgiving of iTurf's inability to show a profit so far.
Online office supplier Value America is planning to go public with 5 million "VUSA" shares, priced between $15 and $17, while online medical claims processor Claimsnet.com is pricing 2.5 million "CLAI" shares between $7 and $9.
Rhythms Netconnections is by far the larger of this week's two networking debuts, with head underwriter Merrill Lynch looking to put nearly 10 million shares on the block for an opening price of $15 to $17. The company, which has picked "RTHM" as its ticker symbol, provides high-speed digital network connections to corporate customers in ten metropolitan markets.
In the near term, Rhythms stands to benefit from a marketing partnership with networking leader Cisco Systems (CSCO). Not only will Cisco jointly market and sell Rhythms' services to its existing customer base, but the two companies will develop new products in collaboration.
These products could compete directly with those offered by Extreme Networks, which provides local area networking (LAN) hardware and software to corporate clients, a market expected to crack $3.4 billion by 2001.
Underwriter Morgan Stanley will price 5 million shares under ticker symbol "EXTR" at $9 to $11 some time this week. 
-- by staff writer Robert Scott Martin
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