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IPO calendar booked solid
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July 23, 2000: 7:00 a.m. ET
Investment banks try to squeeze in 32 deals, some deals should shine
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NEW YORK (CNNfn) - With a week of strong performances under its belt, the initial public offering market may be getting carried away with itself.
Thirty-two deals are scheduled for this week, with companies expecting to raise about $4 billion. If they all go, it would be a record week for the year, according to CommScan, a New York-based investment banking research firm - but that's a big "if."
"We're having a science fiction week in investment banking land," said Irv DeGraw, research director at WorldFinanceNet.com. "They're throwing so much out it's confusing the market."
DeGraw said an "orgy" of deals cuts down on the amount of homework done on each company and can hurt the investor.
But with such a wide range of deals there is a lot of quality to choose from.
IPO with a dash of vermouth
Blue Martini Software could shake and stir the market in its opening, despite the fact that the company's fundamentals are less than stellar.
The San Mateo, Calif.-based company makes point technology software that enables e-commerce transactions to take place from a variety of sources.
Ben Holmes, analyst with ipoPros.com, said based on comparable companies Blue Martini looks like a strong IPO.
DeGraw likes the company's strategy of going after professional services alliances, with companies such as Andersen Consulting, Ernst & Young and Siebel Systems.
"This deal is really speculative, but the company has enough breakthrough to turn out OK," DeGraw said.
Blue Martini had more than $11 million in revenue in 1999, but lost nearly $10 million. Goldman Sachs is the lead underwriter and the company will trade on the Nasdaq as "BLUE." The company plans to price 7.5 million shares between $16 and $18, raising about $127.5 million.
Avici Systems Inc. is also a top pick among analysts and could see a jump of more than 100 percent on its opening day. The North Billerica, Mass.-based company makes high-speed data networking equipment, and being in a sexy sector could be enough to ensure a sharp initial rise.
One drawback could be the competition, as Avici is going up against such big names as Cisco Systems, Juniper Networks and Lucent Technologies.
Avici's lead banker is Morgan Stanley Dean Witter, and the company will list on the Nasdaq as "AVCI."
Genencor International Inc. has a lot of things going for it ahead of its offering. The company is financially sound and in a good position in a strong sector.
Genencor basically makes tools for biotechnology research. The company posted a profit of nearly $18 million in 1999, with revenue of more than $316 million. It hopes to raise about $114 million, pricing 6 million shares between $18 and $20.
"This is one of the few deals of the week that's profitable," said Holmes. "Biotechs are definitely on again and this is probably the strongest one,"
The Palo Alto, Calif.-based company will trade on the Nasdaq as "GCOR" and Merrill Lynch is the lead underwriter.
Back in fashion?
The days of the strong IPO for pure-play Web companies may not be completely gone. Internet conferencing company WebEx Inc. could buck the recent trend of dot.com disasters.
The company hosts Web conferencing on its own network and has alliances with more than 130 companies, including Yahoo!
DeGraw is impressed with their product and marketing drive, but has reservations about the company's spending. The company will spend a good deal of the $45.5 million it expects to raise on marketing.
"This is a classic Internet company and they will be burning cash like there's no tomorrow," DeGraw said. "But the deal is programmed to explode on its first day with 3.5 million shares priced between $12 and $14."
San Jose, Calif.-based WebEx will trade on the Nasdaq as "WEBX" and hopes to raise about $45 million. Goldman Sachs is leading the deal.
The sleeper of the week could be Lexent Inc., which builds local networks for metropolitan areas.
"This is a reasonably priced deal, but they have not proven they can be successful outside New York," DeGraw said.
The New York-based company hopes to raise about $75 million, pricing 5.8 million shares between $12 and $14. The lead underwriter is Credit Suisse First Boston and it will trade on the Nasdaq as "LXNT." 
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