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Wit Capital hits the Street
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June 4, 1999: 3:42 p.m. ET
Internet investment bank jumps 61% in opening day trading on Nasdaq
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NEW YORK (CNNfn) - Internet investment bank Wit Capital hit Wall Street running Friday, seeing a 61 percent jump in afternoon trading after pricing the stock at $9 on Nasdaq.
Wit opened particularly strong, popping to above $15 a share. It then started to tail off in the afternoon. In midafternoon trading, Wit's stock had hit 14-1/2.
Wit (WITC) specializes in taking companies public through the Internet and calls itself the first Internet-based investment bank. Many bank analysts are eagerly watching how it performs, as a harbinger of the investment-bank future.
Wit's first-day performance is very respectable but not the huge kind of leap some dot.com initial public offerings have seen on their first day of trading. In late May shares of eToys quadrupled after opening.
By contrast, Wit's initial performance outdid venerable investment bank Goldman Sachs, which also went public in May and saw its shares jump 33 percent on opening-day trading.
For investors, Wit offers many of the features of an investment bank such as Goldman, with the spice of Internet promise thrown in.
Wit Capital's IPO saw a nice jump from the $9 offer price, followed by a tailing off
In fact Goldman in April bought a stake in Wit that amounts to a little over 16 percent of the company now that it's gone public.
New York-based Wit, which sells stocks for initial public offerings and secondary offerings through online brokerages, co-managed its own offering with Bear Stearns. Thomas Weisel Partners was the co-manager of the offering.
Wit brought in $78.7 million for itself, selling 8.74 million shares at $9. That was at the top of the $7 to $9 expected range filed with regulators.
Wit was originally selling 7.6 million shares. But the underwriters chose to exert their overallotment option of 1.14 million shares, bringing Wit another $10.3 million.
An overallotment is an amount of stock that investment banks underwriting an offering can buy and then sell on to clients on top of the agreed-upon shares in the IPO but don't have to. They normally exercise the overallotment if demand is strong.
Wit sold 12.3 percent of its stock in the offering, including the overallotment. That meant that by Monday afternoon prices the company was worth just over $1.03 billion.
That's its market capitalization, achieved by multiplying the price by the 71.1 million shares outstanding.
All of the 8.74 million shares Wit sold to the public from the company rather than insiders.
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Wit Capital
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