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Healtheon pulls IPO plug
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October 21, 1998: 8:24 a.m. ET
Internet healthcare support firm drops issue despite allure of 'Midas Founder'
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NEW YORK (CNNfn) - Internet healthcare support company Healtheon Corp. has withdrawn its initial public offering due to
"market conditions," the company said late Tuesday.
"The current environment for IPOs and the volatility of the public capital markets did not represent the best opportunity for Healtheon to fund its rapid growth," said company CEO Mike Long.
Instead, the company -- which supplies healthcare providers with information networks -- has received $40 million in new capital from investors led by Kleiner Perkins Caulfield Byers, New Enterprise Associates and Healtheon founder and chairman Jim Clark.
The cash infusion was exactly the amount Healtheon had hoped to raise through the stock offering.
"This funding enables us to continue aggressive investment in the company's business strategy," CEO Long said.
IPO market watchers had touted the Healtheon offering as one of the highlights in an otherwise dull week. The presence of founder Clark -- called "The Midas-Touch Founder" for his role in creating technology mainstay Silicon Graphics Inc. (SGI) and co-founding Netscape Communications (NSCP) -- was expected to bring an element of "star appeal" back to the market.
Less than a month before, investment bank Goldman Sachs Group L.P. canceled its initial offering for similar reasons, citing market volatility.
In addition, the gigantic Conoco offering Thursday is expected to drain most of the free cash from the IPO market. While Healtheon was slated to raise $40 million, Conoco is set to bring in $3.3 billion.
Other than Conoco and the now-canceled Healtheon deal, only five companies will issue their first public shares this week. 
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