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News > Technology
DLJdirect IPO rises
May 26, 1999: 1:30 p.m. ET

Online trader climbs 34 percent; Juno, Edgar debut quietly; StarMedia surges
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NEW YORK (CNNfn) - Online trading firm DLJdirect jumped 34 percent at midday Wednesday, a strong open to its first day of trading but a far cry from the valuations granted to previous Internet-related initial public offerings.
     Shortly after 1 p.m. ET, shares of DLJdirect (DIR), the online unit of investment bank Donaldson, Lufkin & Jenrette, were trading at 26-7/8, up 6-7/8 from their opening price of 20.
     DLJ is offering DLJdirect shares as a tracking stock. Unlike conventional IPOs, investors don't own equity in companies offered as tracking stocks, which are designed to measure the performance of a company's particular business unit.
     The tracking stock has become a popular method among companies to highlight the performance of their Internet units without relinquishing control over those businesses.
     DLJdirect's opening marked the second consecutive day in which a widely anticipated IPO failed to soar to the stratospheric heights usually associated with Internet firms making their public debuts.
     Tuesday, barnesandnoble.com (BNBN) rose 27 percent from its opening price of $18 a share.
     Other Wednesday IPOs failed to catch fire. Shares of Internet service provider Juno Online Services Inc. (JWEB) were trading at 11-13/16, down 1-3/16 from its $13 offering price; while Edgar Online Inc. (EDGR), which provides Securities and Exchange Commission filings on the Internet, slipped 3/16 from its 9-1/2 offering price to 9-5/16.
     Latin America online network StarMedia Network Inc. (STRM), however, was trading at 27-3/4, up 12-3/4 -- or 85 percent -- from its $15 offering price. Even that gain pales in comparison to eToys Inc.'s (ETYS) 320-percent jump in its first day of trading last week.
     Analysts said the relatively lackluster performances of the recent batch of IPOs is a result of the glut of Internet companies looking to cash in on investor enthusiasm.
     "If you track the IPO stock action over the last couple of months, you'll note that the pop off the IPO has actually started to fall over a period of time," said Alan Braverman, Internet analyst at NationsBanc Montgomery Securities.
     Indeed, since eToys soared to 85 from an opening price of 20 in its public debut, its shares have fallen back to 45-3/8 as of midday Wednesday.
     "I think it's a good thing and I think that it's more of a reasonable situation," Braverman said. "In fact, I think this could also indicate that the window for Internet IPOs may not be as wide open as it is for many, many more months."
     DLJdirect, which raised $320 million in the offering, will use the proceeds to fund increased marketing expenses and international expansion.
     DLJ will retain complete control over DLJDirect under the tracking stock structure.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.