 | | Ben Holmes has the market covered: | Sundays:
This Week in IPOs
Tuesdays:
This Week's Secondaries
Wednesdays:
Upcoming Lockup Expirations
Fridays:
The Quiet Period
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Take a second to scroll through the lineup for this week and marvel at the sheer number of deals that are slated to price. I just finished the table and I am astonished myself. Twenty-eight IPOs in one week, that's a lot of deals. But, this market seems more than willing to buy whatever volume of product the syndicate departments can turn out.
While I was preparing this week's list I found myself really drilling down on a particular part of the filings, a section that is usually titled
"PRINCIPAL AND SELLING SHAREHOLDERS". This is where they list most of the large beneficial owners of a company's stock. It is here that you find out who
really believes in these companies as investments. I always read these listings, but this week they just seemed far more telling than usual. This week they seemed packed with what I and many others refer to as
Smart Money. In many of my comments I've included a listing of these shareholders. Take note of the names, and in time you'll begin to recognize them. The involvement of these
uber-investors can be an easy clue-in to the hot deals.
IPOs: Join the discussion on TSC message boards. Of course, only after the deals are priced and the trading has begun can we tell just how smart these people really are.
Let's dig in and take a look at this week's deals:
| B2BSTORES.COM |
| IPO: | (BTBC:OTC SC) | A branded Internet Web site specifically designed to assist business customers in the operation and development of their businesses |
| Deal size: | 2,800,000 |
| Price range: | 10.00 |
| Led by: | Gaines Berland |
| My take: 1/27/2000 reduced from 3,500,000. If you never read another filing in your life, read this one! Pay close attention to the beneficial owners of the stock and the extremely limited operating history. Please be careful. |
| BEASLEY BROADCAST GROUP |
| IPO: | (BBGI:OTC) | The 16th largest radio broadcasting company in the U.S. based on 1998 gross revenues |
| Deal size: | 6,850,000 |
| Price range: | 15.00 - 18.00 |
| Led by: | Credit Suisse First Boston |
| My take: Fresh comps make this IPO an easy read. These deals tend to work for a few points right out of the box. |
| BIO AQUA SYSTEMS |
| IPO: | (SEA:AMEX) | An international broker of animal nutrition products, including fish, feather and krill meal |
| Deal size: | 1,200,000 |
| Price range: | 5.625 |
| Led by: | Institutional Equity |
| My take: 1/3/00 Reduced from 7.30. Unit deal: each unit = 1 share common + 1 warrant. Fish meal. No thanks. |
| BUY.COM |
| IPO: | (BUYX:OTC) | buy.com is a leading multicategory Internet superstore |
| Deal size: | 14,000,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Merrill Lynch |
| My take: This will probably make a few of you scratch your head but I want to compare this deal to WebVan Group (WBVN Quote). What? Think radical business plan and lots of hype. If it works, it works big. |
| CHORDIANT SOFTWARE |
| IPO: | (CHRD:OTC) | Provider of e-business infrastructure software |
| Deal size: | 4,500,000 |
| Price range: | 8.00 - 10.00 |
| Led by: | Robertson Stephens |
| My take: e-biz software deals are as hot as they have ever been. Strong revenue growth and a crack underwriting team. |
| CYPRESS COMMUNICATIONS |
| IPO: | (CYCO:OTC) | Provider a comprehensive single-source communications solutions |
| Deal size: | 10,000,000 |
| Price range: | 14.00 - 16.00 |
| Led by: | Bear Stearns |
| My take: This is a fairly competitive space to operate in. I can't find any good recent comps on the deal. My gut is that this IPO delivers a small premium. |
| DELANO TECHNOLOGY |
| IPO: | (DTEC:OTC) | Provider of communications software that enables companies to use e-mail and the Internet to automate business processes and to personalize and manage interactions |
| Deal size: | 5,000,000 |
| Price range: | 9.00 - 11.00 |
| Led by: | Robertson Stephens |
| My take: Another e-biz software company. I'm not betting against anything in this group. CIBC is a 5% shareholder. |
| DIVERSA |
| IPO: | (DVSA:OTC) | Discovers and develops novel enzymes and other biologically active compounds from diverse environmental sources |
| Deal size: | 6,500,000 |
| Price range: | 13.00 - 15.00 |
| Led by: | Bear Stearns |
| My take: Looking at the recent biotech IPOs that have come it is very clear that the market loves this sector. Remember, the trend is your friend! |
| ESAFETYWORLD |
| IPO: | (SFTY:OTC SC) | Sells disposable garments and equipment intended for activities that must be done in a controlled environment |
| Deal size: | 1,000,000 |
| Price range: | 7.00 |
| Led by: | Kashner Davidson |
| My take: This is a small company doing a small deal from a small underwriter. I don't put a lot of faith in "small" these days. I'm calling it FLAT. |
| FARGO ELECTRONICS |
| IPO: | (FRGO:OTC) | Developer, manufacturer and supplier of desktop systems and associated consumable supplies for the plastic card personalization and data encoding industry |
| Deal size: | 5,000,000 |
| Price range: | 14.00 - 16.00 |
| Led by: | Prudential Volpe Technology |
| My take: This is a cool little company that just goes about its business making money. Nothing flashy, but there will always be buyers for profitable operations like this. I like it. |
| FASTNET |
| IPO: | (FSST:OTC) | Internet service provider targeting small and medium sized enterprises in selected high growth markets in the mid-Atlantic area of the U.S. |
| Deal size: | 4,000,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | ING Barings Furman |
| My take: We haven't seen an ISP deal in a while. This one looks pretty solid. An H&Q limited partnership is a significant shareholder in the company. Always nice to see smart money involved. |
| FLAG TELECOM HOLDINGS LTD |
| IPO: | (FTHL:OTC) | Develops and offers telecommunications products and services to licensed international carriers, Internet service providers and other telecommunications companies |
| Deal size: | 26,400,000 |
| Price range: | 20.00 - 22.00 |
| Led by: | Salomon Smith Barney |
| My take: Shareholders include GE, AT&T, Bell Atlantic, etc. Big revenue and profits! This is a big transoceanic networking play and it works. |
| JEREMYS MICROBATCH ICE CREAMS |
| IPO: | (JMIC:OTC) | Jeremy's Microbatch Ice Creams develops, markets and sells ice cream using high-quality ingredients |
| Deal size: | 1,200,000 |
| Price range: | 6.00 - 7.00 |
| Led by: | First Montauk Securities |
| My take: This is a small underwriter that hasn't produced many deals lately. The deal is small, the company loses money and I've never eaten the ice cream. This deal lacks Blue Sky clearance in all 50 states. I'm not a fan. |
| LANDACORP |
| IPO: | (LCOR:OTC) | Offers business-to-business e-medical management solutions to healthcare payers and providers |
| Deal size: | 3,500,000 |
| Price range: | 8.00 - 10.00 |
| Led by: | Chase H&Q |
| My take: VCs Sequoia Capital and Greylock believed enough to put their money on the line. I like this deal. |
| LANTE |
| IPO: | (LNTE:OTC) | Internet services company that develops technology-based solutions that enable emerging electronic markets |
| Deal size: | 3,100,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Credit Suisse First Boston |
| My take: Big revenue and just a shade in the red. Dell USA, a unit of Dell (DELL Quote)and Michael Dell himself are significant shareholders. I hear that this is a smokin' hot deal! |
| LIGHTSPAN PARTNERSHIP |
| IPO: | (LSPN:OTC) | Provider of curriculum-based educational software and Internet products and services used both in school and at home |
| Deal size: | 7,500,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Credit Suisse First Boston |
| My take: I've been underwhelmed by "education" deals in the past but this one looks strong. Accel Partners, Kleiner Perkins, Microsoft (MSFT Quote), Tribune Company, Comcast Cable (CCZ Quote)and Cox Communications (COX Quote)are all shareholders. |
| ORGANIC |
| IPO: | (OGNC:OTC) | Internet professional services firm focused on the customer-to-business market |
| Deal size: | 5,500,000 |
| Price range: | 12.00 - 14.00 |
| Led by: | Goldman Sachs |
| My take: This is a really great deal. Good comps are Razorfish (RAZF Quote), Modem Media (MMPT Quote) and Agency.com (ACOM Quote)--all three more than doubled on their first days. |
| PETS COM |
| IPO: | (IPET:OTC) | Online retailer of pet products, integrating product sales with expert information on pets and their care |
| Deal size: | 7,500,000 |
| Price range: | 9.00 - 11.00 |
| Led by: | Merrill Lynch |
| My take: Amazon.com (AMZN Quote) owns a full 30.4% post-offering. Hummer Winblad owns another 15.8%. This is a big scalable business. Will it work? My guess is -- yes! |
| PRECIS SMART CARD SYSTEMS |
| IPO: | (PSPS:OTC SC) | Develops and markets commercial software products used with a technology commonly referred to as "smart cards" |
| Deal size: | 1,000,000 |
| Price range: | 6.00 |
| Led by: | Barron Chase |
| My take: The underwriter does nothing for me, the technology is cool but the deal is just too small. Revenue for the first 9 months of '99 was less than $50k. Be careful. |
| SAVVIS COMMUNICATIONS |
| IPO: | (SVVS:OTC) | Provider of global networking and Internet solutions to medium and large businesses, multinational corporations and Internet service providers |
| Deal size: | 17,000,000 |
| Price range: | 22.00 - 25.00 |
| Led by: | Merrill Lynch |
| My take: 1/31/00 Shares increased from 12,765,957. Savvis provides the backbone for a large number of the 235,000 Bridge terminals installed. My sense is that Bridge is an up and coming force in financial content distribution. Interesting deal. |
| SUNHAWK.COM |
| IPO: | (SNHK:OTC SC) | Provider of digital sheet music over the Internet |
| Deal size: | 1,400,000 |
| Price range: | 11.50 - 12.50 |
| Led by: | Joseph Gunnar & Co |
| My take: 12/27/99 Increased from 8.00 - 9.00. 8/25/99 Increased from 7.00 - 8.00. I think the business is a neat idea, but they are slow to gain traction and have already compiled serious losses. I'd be careful. |
| VANTAGEMED |
| IPO: | (VMDC:OTC) | Provider of health care information systems and services distributed to over 10,000 customer sites |
| Deal size: | 3,000,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Advest |
| My take: 1/14/00 Price changed from 9.00 - 11.00. This is a sort of medical IT roll-up company. The underwriters are decent people but not powerhouses. Revs are respectable. I'm just not excited by any of it. |
| VARSITYBOOKS.COM |
| IPO: | (VSTY:OTC) | Online retailer of new college textbooks |
| Deal size: | 4,075,000 |
| Price range: | 12.00 - 14.00 |
| Led by: | Robertson Stephens |
| My take: VCs Mayfield and FBR Ventures are shareholders. This deal has some buzz around it and I'm guessing a decent premium is in order. |
| VIA NET.WORKS |
| IPO: | (VNWI:OTC) | Provider of Internet access and services focused on small and mid-sized businesses in Europe and Latin America |
| Deal size: | 14,000,000 |
| Price range: | 15.00 - 17.00 |
| Led by: | Donaldson Lufkin & Jenrette |
| My take: Intense revenue growth and a very capable underwriting team. Foreign ISP deals have worked well recently. I like it. |
| VICINITY |
| IPO: | (VCNT:OTC) | Provider of Internet-based marketing infrastructure services |
| Deal size: | 6,000,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | JP Morgan |
| My take: 1/20/00 Price increased from 10.00 - 12.00. Shares increased from 5,000,000. e-biz deals work. CMG@Ventures and Oak are backers. This one works. |
| WEBMETHODS, |
| IPO: | (WEBM:OTC) | Provider of infrastructure software and services that allow companies to achieve business-to-business integration |
| Deal size: | 4,100,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | Morgan Stanley Dean Witter |
| My take: MSDW is still every bit the factory for hot IPOs. B2B software deals are the gold standard for performance. Mayfield, FBR, Goldman Sachs (GS Quote) and Dell USA all found their way into this investment. |
| WITNESS SYSTEMS |
| IPO: | (WITS:OTC) | Provider of recording and analysis software that enables companies to enhance their customer interactions across multiple communications media |
| Deal size: | 3,800,000 |
| Price range: | 12.00 - 14.00 |
| Led by: | Chase H&Q |
| My take: Who wants another software IPO? Everybody! Strong revenue growth and Hambrecht in the lead. |
| XCARE.NET |
| IPO: | (XCAR:OTC) | Provider of Internet-based, business-to-business connectivity, information exchange and electronic commerce solutions for health care |
| Deal size: | 5,000,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | Robertson Stephens |
| My take: Erratic revenue growth but a strong sector. Robbie knows health care deals pretty well and the market is hot. This one probably works. |
