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Community Health IPO up
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June 9, 2000: 5:57 p.m. ET
Rural hospital firm's positive debut shows 'old economy' IPOs strong
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NEW YORK (CNNfn) - "Old economy" companies continue to gain a foothold in the IPO market with a deal from Community Health Systems Inc. that had a positive debut Friday.
Community Health, a Brentwood, Tenn.-based owner and operator of rural-area hospitals, climbed 5 percent to 13-11/16 Friday, after hitting a high of 14-1/16. The company raised $244 million after pricing 18.75 million shares at $13 each -- the low end of a $13-to-$15 target range that had been reduced from a $15-to-$17 a share range originally filed.
 While not spectacular, Community Health's performance shows that brick-and-mortar companies are experiencing something of a rebirth in the lagging new issues market, said analyst Steve Tuen, of IPO Value Monitor.
Community Health Systems (CYH: Research, Estimates) also follows a dismal debut by UbiquiTel Inc. (UPCS: Research, Estimates), a Sprint PCS affiliate, which traded Friday afternoon at the $8 offer price set on Wednesday. The stock fell below the offer price before rebounding Thursday. Many analysts expected UbiquiTel to produce a stronger IPO, and now believe that the once-mighty wireless IPO sector is filling up.
"Community Health is doing all right for an 'old economy' stock," Tuen said. "Even in a bad IPO market, there is still an open window for them, and they are not getting pushed out of the way by shiny new companies."
Community Health's deal is similar to the offering from Krispy Kreme Doughnuts Inc.(KREM: Research, Estimates), another old economy deal, Tuen said. On April 5, the Winston-Salem, N.C.-based doughnut maker produced a strong IPO, closing at 37 after pricing three million shares at $21 each.
"Community Health is a real company, not a 'dot.com,'" Tuen said. "It's something different from what investors are accustomed to."
Community Health owns or operates 49 hospitals in 20 states. For the three months ended March 31, the company reported net income of $921,000 on revenue of $308.7 million compared with net income of $1.9 million on revenue of $263 million in the year-earlier quarter.
On Friday, Krispy Kreme dropped 9/16 to 59-3/4, while UbiquiTel rose 3/32 to 8-1/8. 
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