Ziff IPO starts modestly
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April 29, 1998: 4:33 p.m. ET
Publishing company's shares gain but lack the splash of recent tech offers
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NEW YORK (CNNfn) - Ziff-Davis Inc.'s initial public offering made a positive debut Wednesday, though not as strong as some watchers had anticipated.
Shares of Ziff-Davis (ZD) ended their first day at 17-3/16 up 1-11/16 from the asking price of 15-1/2. More than 17 million shares changed hands. Analysts had expected the IPO to open between $14 and $17 a share.
Ziff-Davis publishes PC Magazine, PC Week and Computer Shopper. It also publishes ZDNet.com, a leading technology news web site.
The company, a unit of Japan's Softbank Corp., also runs the Comdex computer trade shows. The annual Fall Comdex show is the largest technology convention in the United States.
Ziff-Davis' IPO has been the subject of much hype in the past couple of weeks, largely because analysts believed investors would be drawn in by the company's worldwide recognition and its Internet presence.
But analysts also have expressed doubt about Ziff-Davis' short-term prospects because of its lingering debt and projected losses.
When Softbank bought Ziff-Davis in 1995, it shifted $2.5 billion of its debt to the computer magazine publisher.
Eric Hippeau, Ziff-Davis chairman and chief executive officer, told CNNfn the company soon will be able to erase that debt.
"We're raising $1.5 billion in bank debts and $250 million in high yield to reduce the debt we have currently," he said.
Hippeau added that Wednesday's IPO will help Ziff turn $900 million of its debt into $1.5 billion in equity. (306K WAV) or (306K AIFF)
Ziff-Davis also will use the $399.9 million raised in Wednesday's IPO to buy back some of its properties.
"We're repurchasing some of our own assets that were owned by Softbank," Hippeau said. "ZDNet, for instance, is now being repurchased. And we also have plans for expansion across our different media platforms." (254K WAV) or (254K AIFF)
Hippeau said one of those expansion ventures, ZDTV, Ziff-Davis' 24-hour cable channel, will launch May 11.
"As the penetration of computers in households reaches critical mass, the next big medium for computer information will be television," Hippeau said.
Ziff-Davis' rather low-key opening day contrasts with recent technology IPOs that made a splash on Wall Street. Most notably, Broadcom Corp. earlier this month gained 123 percent on its first day of trading.
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