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IPOs seek star quality
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October 19, 1998: 10:02 a.m. ET
Desperate for a sure moneymaker, dry market looks to Conoco, Healtheon
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NEW YORK (CNNfn) - At a time when initial offerings are at a virtual standstill, the humdrum IPO market is desperate for a touch of star power, and two of this week's seven deals -- Conoco's gigantic $3.3 billion offering and Healtheon's famed Silicon Valley pedigree -- might just deliver that blockbuster.
Healtheon founder may pack buyers in
Internet healthcare startup Healtheon brings the solid track record of cofounder James Clark to the selling block when it goes public Tuesday. Clark founded Silicon Graphics (SGI) in 1982 and co-founded Netscape Communications (NSCP) four years ago.
However, even though Clark adds a bit of certainty to Healtheon's $40 million offering, some market watchers say demand isn't as strong as expected. As one trader said, "The market is not yet ready to reward marginal deals," and 2-year-old Healtheon, burdened by $73 million in debt and annual revenue of only $70 million, is one of those "marginal" calls.
In its favor, the Santa Clara, Calif.-based company offers a cheaper alternative to existing healthcare information systems. By pushing the paperwork of doctors, hospitals, insurance providers, patients and labs onto the Internet, Healtheon already is competing with firms like IBM (IBM) and HBO & Co. (HBOC) for a share of a $250 million industry.
So far, Healtheon has relied mainly on four customers, including United HealthCare (UNH) and SmithKline Beecham Clinical Laboratories (SBH), and some analysts believe the industry at large will be slow to adapt.
Petroleum giant takes a bow
Conoco, the nation's eighth-largest oil company, accounts for practically all of the $3.4 billion expected to enter the IPO market this week. In the biggest U.S. offering ever, Morgan Stanley plans to raise $3.3 billion for 150 million Conoco shares.
Unlike new or less-familiar companies, DuPont (DD) subsidiary Conoco will draw on decades of proven customer appeal when it starts trading Thursday.
Wall Street is expected to absorb the entire initial offering and have an appetite for even more. According to one trader, "The deal isn't a flash in the pan."
Internet player also in repertory
Traders with a taste for pure Internet deals may watch for theglobe.com's Tuesday offering. The company, which offers Web page building services and chat rooms, is expected to raise $37.2 million at a price of $11 to $13.
If rival Web hosting company GeoCities (GCTY) is any guide, theglobe.com certainly will generate interest. GeoCities defied the odds when its IPO more than doubled on its first day of trading, closing at 37-5/16 after pricing at 17. 
-- by staff writer Bambi Francisco
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