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IPOs bank on Internet fire
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March 14, 1999: 6:28 p.m. ET
Flashnet and Multex join iVillage in the week's relatively icy offering chute
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NEW YORK (CNNfn) - A gust of fresh Internet offerings could be just what the chilly IPO market needs to get its fires roaring again, although any heat generated by the Net debuts is unlikely to spread very far.
Last week was a gloomy one for initial public offerings, with one company suffering through a "broken" debut and a number of other apparently firm deals postponed until later in the month or indefinitely.
Only computer offerings proved strong enough to not only come out of the IPO chute but thrive afterward.
Internet newsstand RoweCom (ROWE) enjoyed the opening applause that investors normally grant Web debuts, soaring 19-3/4 or 123 percent this week from its starting price of $16. Indian computer firm Infosys Technologies (INFY) followed not close behind, climbing 12-5/8 or 37 percent from its own fixed start of $34.
However, the week's only other major offering, Argosy Education Group (ARGY), had no such luck, falling below its starting price of $14 in a so-called unsuccessful or "broken" IPO.
In general, broader market conditions are to blame. Small-cap stocks trailed their larger cousins throughout the week, with the Russell 2000 index ending up an uninspiring 0.08 percent. By contrast, blue chips soared 1.41 percent and the S&P 500 index performed even better, climbing 1.48 percent.
The year-to-date figures are even worse. The Russell is down 5.60 percent so far this year, while its beautiful stepsisters in the S&P 500 soared 5.30 percent and the Dow leapt 7.54 percent.
"The hot Internet sector"
This week, three Internet hopefuls lead a relatively crowded IPO slate to the offering block.
Internet service provider Flashnet Communications is set to price 3 million shares under ticker symbol "FLAS" at between $12 and $14 sometime this week.
The company competes with such established players as America Online (AOL), Mindspring (MSPG) and Earthlink (ELNK) for a piece of the intensely competitive but potentially very lucrative Internet market. So far, it has amassed 170,000 customers compared to AOL's 15 million users.
Women's Web site iVillage.com is also back in line to go public, having postponed its offering for the last several weeks. The company targets the coveted female Internet demographic for advertising revenue, bringing in $9.1 million in the first three fiscal quarters of 1998.
Although iVillage recently has suffered the adverse publicity of an ex-employee lawsuit, the company still plans to bring 3.65 million shares to the block at a starting price between $12 and $14. It is set to start trading Wednesday under the ticker symbol "IVIL."
The third of the week's trio of Internet offerings is financial data provider Multex.com, a partner of the CNNfn Web site. Multex offers payment-on-demand access to Wall Street analyst reports and other investment information through its own Web site and those of several news and financial partners.
The company has managed to trim its operating losses in the last three months, reducing an average per-quarter loss of $2 million in 1997 to a $1.6 million loss in the first fiscal quarter of 1998.
Like iVillage, Multex already has locked in a firm date for its debut and now looks forward to Thursday when 3 million "MLTX" shares are set to start trading between $9 and $11.
Still in the pipeline
Sporting good and automotive retailer G.I. Joe's has chosen the better part of valor, postponing its offering until sometime this week. Roofing supplier Eagle Supply has done likewise, delaying its 2 million-share offering from last month in search of more hopeful market conditions.
Computer firm Pomeroy Select Integration Solutions and biotech Implant Sciences have slid even farther back into the pipeline and will now price "sometime this month."
On the more definite side of the street, biotech Careside has locked in the next five-day window for its own debut. Working with underwriter Fahnestock & Co., the blood-testing system developer plans to price 2.8 million shares between $8 and $10.
Discount travel agency Cheap Tickets is also on the block, putting up 3.5 million "CTIX" shares at a starting price between $11 and $13. The company is already profitable, earning $1.4 million on nine-month 1998 revenue of $131 million, and it plans to use its offering proceeds to build brand identification and expand into high-tech channels.
Finally, Consol Energy brings a note of rock-hard fundamentals to the week's debut calendar. The company is one of the largest U.S. coal miners and, while not quite as glamorous as the Internet offerings, promises to dwarf the rest of its IPO class.
Prestigious co-underwriters J.P. Morgan and Merrill Lynch are set to price 22.6 million Consol shares sometime this week in a range of $18 to $21. The company's ticker symbol will be "CNX."
-- by staff writer Robert Scott Martin
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