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Market drop may freeze IPOs
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April 16, 2000: 7:12 a.m. ET
Analysts predict market free fall could halt IPO pricings for a week - or longer
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - Fresh off the IPO market's most dismal performance of the year thus far, 22 prospective offerings are tentatively poised to deliver new shares to Wall Street this week.
Whether any of those offerings actually make it beyond the starting gate, however, remains to be seen.
"When the broad market gets a cold like this, the IPO market gets pneumonia," said Charles Kaplan, chief market analyst with Equity Analytics. "You really have to look very closely at the proposed deal right now. But, in general, I doubt anything will get priced over the next couple of weeks."
Indeed, amid a firestorm of volatility last week, 16 of the 26 companies planning to sell shares publicly for the first time never made it to the open market.
Five of those companies chose to postpone their offerings indefinitely and two took the rare step of withdrawing their offerings altogether, citing the inhospitable market conditions. Eleven others postponed their pricing dates, including two that readjusted their offering terms to try and induce more demand.
 Among those that did come out, many were battered. Five of the 10 new offerings priced below their expected price range, while three finished their first day of trading in negative territory.
This week's market should be helped by the addition of at least one well-known name, Internet service provider Alta Vista Co., but with few other big names to entice investors, analysts believe many may hold out until the following week, when, or perhaps if, AT&T Wireless' projected $10 billion offering hits the Street.
"I'd [tell investors to] hold out for AT&T Wireless," said Jeff Hirschkorn, senior market analyst with IPO.com. "With things so dicey, I'd just wait for Mom Bell to come in and make it all better."
Alta Vista takes the lead
Clearly, the week's most anticipated offering is Alta Vista Co., the well-known Internet service provider best known for its popular search engine.
The company, which is owned by Internet investor CMGI Inc. (CMGI: Research, Estimates) and Compaq Computer Corp. (CPQ: Research, Estimates) is looking to raise in excess of $281 million by selling 14.8 million shares at between $18 and $20 per share.
Although investors have largely turned a cold shoulder toward new Internet offerings last week, analysts noted those with proven brand names or strong products, such as Nuance Communications, have fared much better.
"Alta Vista will be okay," Hirschkorn said. "It's a brand name, people recognize it and CMGI can group its technology offerings together and really provide Alta Vista a boost."
Alta Vista was recently listed as the nation's ninth-largest Internet property with more than 54 million unique visitors during January alone, according to research firm Media Matrix. The company plans to trade under the ticker "ALTA"
Searching beyond Alta Vista
Beyond the Alta Vista offering, however, there is little else that really enthralls analysts.
One issue gaining attention is 360Networks Inc., "TSIX," a Vancouver-based provider of fiber optic communications system products that boasts a number of high-profile institutional investors, including Liberty Media Corp. (LMG.A: Research, Estimates) and Goldman Sachs Group (GS: Research, Estimates).
The company hopes to offer 46 million shares, a relatively large offering in today's market, and raise $782 million in the week's largest offering. By the end of next year, 360Networks hopes to lay claim to a fiber optic network stretching 56,300 route miles, including nearly 11,000 miles in Europe.
Another possible big gainer is Software Technologies Corp., a Monrovia, Calif.-based e-business integration software company that not only features well-known investment backers, such as Norwest Corp., but also already has several well-known clients, including Barnesandnoble.com Inc. (BNBN: Research, Estimates), Nike Inc. (NKE: Research, Estimates), and J.P. Morgan (JPM: Research, Estimates).
The company, which will trade under the ticker "STCS" plans to offer 6.1 million shares at an expected range of $16 and $18.
Finally, analysts expect strong demand for QS Communications, "QSCG," a German company that provides high-speed Internet access using digital subscriber lines. Although the DSL Internet access market is generally saturated in the United States, it is only beginning to hit Germany, leaving QS Communications plenty of upside for growth, Hirschkorn said.
The company hopes to price 20.2 million American depositary receipts at between $38.65 and 44.91 per share.
In addition to this week's new offerings, there are several holdovers from last week, including Crown Media Holdings Inc., the family-oriented television production parent of Hallmark Entertainment Network and the Odyssey Network, which hopes to raise $250 million dollars by selling 12.5 million shares at between 19 and 21 per share. 
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