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News > Deals
IPOs peek out into the fray
April 17, 2000: 5:03 p.m. ET

Still reeling from AltaVista's delay, prospective offerings eye stability
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - The stock market's minor recovery Monday may
    provide at least a handful of prospective initial public offerings with the necessary gumption to venture onto a volatile Wall Street later this week.
    But with the IPO ranks already thinned considerably by the withdraw or postponement of an additional 9 expected new offerings since the close of trading Friday, many analysts believe most prospective offerings will remain entrenched in the safety of privately-held hands for at least a week or two longer.
    "I think [the IPO market] has been severely affected," said Mark Basham, IPO analyst with S&P "It will take quite awhile for it to really come back to healthy levels."
    Indeed, the outlook for prospective IPOs dimmed considerably when this week's most highly-anticipated offering, Web portal AltaVista Co., postponed its expected $280 million offering after the markets closed on Friday.
    Four other prospective offerings quickly followed suit, while an additional four companies took their offerings off the table all together.
    
IPOs keeping their heads low

    That leaves 16 offerings still on the calendar to price this week, although analysts and traders aren't expecting more than a handful to actually hit the market.
    "Our view is we want to respond to demand," said Tom Ortwein, head of the capital markets desk at CIBC World Markets, which is underwriting two companies still on the calendar for this week. "There is no sense trying to force the matter."
    Ortwein said he was still "dubious" about the prospect of CIBC's two prospective IPOs -- optical inspection system manufacturer Camtek and drug researcher ViroLogic Inc. -- pricing sometime this week.
    Other underwriters expressed similar outlooks, although at least one syndicate -- Donaldson, Lufkin & Jenrette -- said it now expected its two offerings to price this week.
    Looming in the distance is the widely-anticipated offering from AT&T Wireless due out next week, which some project could raise $10 billion or more, if the company decides to proceed. Some analysts believe such a high-profile offering could end up re-igniting the IPO market.
    
AT&T Wireless a savior?

    But few now are expecting AT&T Wireless to venture into the fray.
    "Even AT&T Wireless may not be able to price in this environment," said Charles Kaplan, chief market analyst with Equity Analytics. "Even though they are AT&T, there's no guarantee that their syndicate guys will be able to put the deal away."
    Ortwein said the market's volatility in recent week has sent both underwriters and investors looking for prospective offerings with either a proven brand name and track record or an proprietary technology. Anything else, he said, will likely remain in the waiting room for now.
    "I don't think there will be space for the 'me-too' companies for a while," he said. "You had something like 240 deals queued up last quarter. Many of them were IPOs for concept issues and a lot of those will probably not end up making it."
    Working in the favor of prospective IPOs, Basham said, is the continued strong earnings performance by U.S. corporations demonstrated so far this quarter. But he also agreed the days of monster first-day gains are likely over for the time being. (333K WAV) (333K AIFBack to top

  RELATED STORIES

Alta Vista IPO delayed - Apr. 17 , 2000

Market drop may leave IPOs out in the cold - Apr. 16 , 2000

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.