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Avistar falls 22% in debut
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August 17, 2000: 5:09 p.m. ET
Labor Day slowdown dampens interest; Five IPOs expected to trade Friday
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NEW YORK (CNNfn) - Avistar Communications Corp., which develops video communications networks for businesses, fell 22 percent below its offer price in its debut Thursday, a day when it was the only new issue to begin trading.
Avistar Communications Corp. opened at 12-1/16, hit a high of 14 and then plummeted 2-5/8 to 9-3/8.
The pending Labor Day holiday helped to dampen investor interest in the deal, said Corey Ostman, co-chief executive of Alert-IPO.com. So far this week, only five initial public offerings have begun trading -- a far cry from last week when 30 deals opened. On Friday, five deals, including anticipated IPOs from WJ Communications Inc. and Viasource Communications Inc., are expected to begin trading.
 "It's definitely the time of year," he said. "We're not seeing a super hot IPO market now."
Wall Street's unease with the video conferencing sector also helped mute interest. The sector is changing so quickly that it is hard to determine which company will emerge as the industry leader, Ostman said.
"There is no question that the market for video conferencing will do well," he said. "But competitors can just come out of nowhere. [That] makes it difficult to see who will be the one."
Avistar raised $36 million after selling 3 million shares at $12 each, below its anticipated price range, through underwriters Chase H&Q. Avistar had planned on selling 3.6 million shares at $13 to $15 each.
Redwood Shores, Calif.-based Avistar Communications (AVSR: Research, Estimates) makes communications networks that let customers such as Chase Manhattan Bank (CMB: Research, Estimates), UBS Warburg and Boeing Corp., place interactive video calls, watch broadcasts and produce video content from a desktop computer.
The company had net losses of $2.8 million on revenues of $9.3 million for the six months ended June 30.
After the IPO, UBS Inc., a unit of Switzerland's UBS AG, the third-largest bank in Europe, will hold a 4.2 percent stake, 
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Avistar
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