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Thin week ahead in IPOs
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October 31, 1999: 5:42 p.m. ET
Technology, dot-com firms lead way, with Italian utility set to issue ADRs
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NEW YORK (CNNfn) - The list of initial public offerings for the upcoming week is not particularly long, but there are a few companies IPO analysts will be eyeing, almost all of which are technology- or Internet-based with the exception of one European offering, which may provide the market with the world's largest debut.
Cobalt Networks, which will trade under the ticker symbol COBT, plans to sell 5 million shares in the $14 to $16 price range. Goldman, Sachs is serving as the lead underwriter.
The Mountain View, Calif.-based company produces network infrastructure devices known as server appliances, which use the free Linux operating system and are designed to deliver a few network-based applications well. Its principal product lines, the Cobalt Qube and Cobalt RaQ, enable customers to perform Internet-related applications such as file serving, Web hosting and the providing of software applications over the Internet including e-mail and electronic commerce.
The company reported a net loss in 1998 of roughly $10.5 million on $3.5 million in revenue.
"Early on it identified the Linux market as important to be part of," said Gail Bronson, senior analyst at IPO Monitor. Big hardware and software makers are expanding their ties to Linux, which won IBM's endorsement in February.
At the very least, David Menlow, president of IPO Financial Network noted, Cobalt could "get a lot of attention in a thin market."
In the dot-com category, Tickets.com, which will trade under the symbol TIXX, is expected to price 6.7 million shares in the $7 to $9 range with Morgan Stanley Dean Witter as the lead underwriter.
The Newport Beach, Calif.-based firm provides tickets, event information, and related services through retail outlets, call centers and the Internet.
The firm posted a net loss of $57.3 million on revenue totaling $47.7 million in 1998.
This IPO may find success because it is "something that is attractive to a lot of people -- it is an easily understandable e-commerce play," Bronson said.
Another issue that may enjoy a good run-up is Wireless Facilities, an independent provider of outsourced services for the planning, design and deployment of wireless networks.
"Everyone recognizes that wireless platforms are the next rev (step) of the Internet," Bronson said.
The company posted net income of $4.96 million in 1998 on revenue of $51.9 million, and counts among its customers many of the leaders in the wireless telecom industry.
The firm, based in San Diego, Calif., plans to sell 4 million shares in the $13 to $15 price range under the ticker symbol WFII. The lead underwriter for the offering is Credit Suisse First Boston.
Whether or not they'll be the "wow of the week" is hard to tell, Bronson said, but Be Free Inc., a provider of online marketing services for e-commerce merchants and Internet portals, may get some positive attention.
"They've been around long enough to have a certain following and name recognition," Bronson said.
The Marlborough, Mass.-based company reported a net loss of $3.7 million in 1998 on revenue totaling $1.3 million.
It plans to trade under the ticker symbol BFRE and will sell 4.9 million shares between $15 and $17. The lead underwriter is Donaldson, Lufkin & Jenrette.
Among the week's international offerings, the partial privatization of Italian public utility company Enel may deliver one of the world's largest market debuts, if not the largest.
Although the IPO will not price until sometime during the weekend, according to its lead underwriter Merrill Lynch, the company will issue American depositary receipts to trade on the New York Stock Exchange, said Corey Ostman, chief technology officer of Alert IPO.
The worth of the total offering has been estimated as high as $19.6 billion.
If the offering is priced at the higher end of the anticipated 3.9 to 4.3 euros range, it would raise more cash than last year's $18.2 billion IPO of NTT DoCoMo, Japan's largest cellphone network operator.
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