 | | 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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Biotech deals are everywhere this week! This is a surprise to me given the total lack of interest in the group last week. The exception of course being
Luminex (LMNX Quote) which rocked on its first day out of the box. The difference seems to be that Luminex is a biotech tool builder vs. being a tool user. Drug discovery companies fit into this latter group. The market apparently makes a distinction. Oh well.
That having been said, the real story this week is wireless. This is a screamin' group and you would do well to pay attention.
The IPO market has without question taken a turn towards cold. What do you do? Buy those sectors that are still working -- I call them
The Gold Standards and they are:
- Networking Technology
- Software
- Wireless Technology
Nothing in life is certain, but this I will guarantee: You will lose your shirt if you ignore the signs and continue to buy deals in cold or dead sectors.
Let's look at the deals:
| ADOLOR |
| IPO: | (ADLR:OTC) | Discovers, develops and plans to commercialize novel and proprietary pharmaceutical products. |
| Deal size: | 6,000,000 |
| Price range: | 12.00 - 14.00 |
| Led by: | Warburg Dillon Read |
| My take: Biotechs, especially drug discovery deals, have taken a turn for the worse lately. The IPOs in this group were a sort of lagging indicator. I've quickly turned cold on the whole lot. |
| BROADVIEW NETWORKS HOLDINGS |
| IPO: | (BDVU:OTC) | An electronically integrated communications provider. |
| Deal size: | 7,000,000 |
| Price range: | 18.00 - 20.00 |
| Led by: | Goldman Sachs |
| My take: Here's another CLEC type deal (they've made up their own acronym), this one with real revenues. Update: This one was held over from last week. I'm still positive on this deal. |
| CABOT MICROELECTRONICS |
| IPO: | (CCMP:OTC) | Supplier of slurries used in chemical mechanical planarization. |
| Deal size: | 4,000,000 |
| Price range: | 15.00 - 17.00 |
| Led by: | Goldman Sachs |
| My take: This is a tough company to categorize: Is it a semiconductor play? electronics? chemical? industrial abrasive? I say yes to all four. Regardless, it is quite profitable and it's looking like a premium deal. |
| CAMTEK |
| IPO: | (CAMT:OTC) | No description available. |
| Deal size: | 2,800,000 |
| Price range: | 16.00 - 18.00 |
| Led by: | CIBC World Markets |
| My take: Non-EDGAR filing. I have almost no info on this deal and currently I'm voicing NO OPINION. I wish these Isreali companies would start hiring law firms that file via EDGAR, in fact I think you should stop buying deals altogether that don't use the system. |
| DRUGABUSE SCIENCES |
| IPO: | (DASI:OTC) | Biotechnology company dedicated to developing and marketing novel therapies for alcohol and drug abusers |
| Deal size: | 4,000,000 |
| Price range: | 13.00 - 15.00 |
| Led by: | Warburg Dillon Read |
| My take: Hard to find comps on this one, but the market opportunity is huge. Update: Biotech IPOs are a very unclear group at this moment in time. Watch as many comps as you can trade to stay current with this market. |
| ECHAPMAN COM |
| IPO: | (ECMN:OTC) | New corporation designed to bring together the financial services of The Chapman Co., Chapman Capital Management and The Chapman Insurance Agency. |
| Deal size: | 3,333,333 |
| Price range: | 14.00 - 16.00 |
| Led by: | The Chapman Co. |
| My take: This entire deal is a one-man operation: He's judge, jury and underwriter. A complete lack of arms length dealing makes me afraid for anyone who buys this IPO. Read the filing; send your comments. |
| EXELIXIS |
| IPO: | (EXEL:OTC) | Leader in model system genetics and comparative genomics. |
| Deal size: | 9,100,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Goldman Sachs |
| My take: See my comments on biotechs in general this week. Watch the comps for confirmation. |
| GOAMERICA |
| IPO: | (GOAM:OTC) | Provider of nationwide wireless Internet services. |
| Deal size: | 10,000,000 |
| Price range: | 14.00 - 16.00 |
| Led by: | Bear Stearns |
| My take: Wireless! Of all the groups to be nvloved in, this is one of the gold-standards. Bear is certainly capable and has pulled off some powerful coups in the past. |
| HEALTHSTREAM |
| IPO: | (HSTM:OTC) | Is developing a Web-based solution to the continuing education and training needs of the healthcare community utilizing a proprietary technology. |
| Deal size: | 5,000,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | Robertson Stephens |
| My take: 3/9/00 Price increased from 9.00 - 11.00. Strong backers and a pretty neat buisiness model. Continueing ed for health care pros is a huge opportunity. I like it for at least a few points. |
| I3 MOBILE |
| IPO: | (IIIM:OTC) | Provider of personalized information to users of wireless communications devices in North America. |
| Deal size: | 4,400,000 |
| Price range: | 14.00 - 16.00 |
| Led by: | Deutsche Alex. Brown |
| My take: Wireless continues to be a hot group. Revenue is growing steadily, losses are reasonable. Wireless content delivery is the newest new thing and the upside is gigantic. Do I like the deal? You betcha! |
| INTERSHOP COMMUNICATIONS |
| IPO: | (ISHP:OTC) | Providers of electronic commerce software. |
| Deal size: | 4,350,000 |
| Price range: | tba |
| Led by: | CS First Boston |
| My take: E-comm software deals still have my attention -- this one has serious revenue growth. This is one of the brighter spots on the calendar this week. Each ADS represents 1/10 of one bearer ordinary share. |
| INTROGEN THERAPEUTICS |
| IPO: | (INGN:OTC) | Developer of gene therapy products for the treatment of cancer. |
| Deal size: | |
| Price range: | tba |
| Led by: | SG Cowen |
| My take: We hear that this deal is coming this week, but we cannot find a complete set of terms. Until we have all the numbers we cannot post an opinion. |
| KRISPY KREME DOUGHNUTS |
| IPO: | (KREM:OTC) | Krispy Kreme is a leading branded specialty retailer of premium quality doughnuts. |
| Deal size: | 3,000,000 |
| Price range: | 18.00 - 20.00 |
| Led by: | Deutsche Alex. Brown |
| My take: Donuts! I've eaten these and they are pretty good. While the company is a mature and profitable operation, the odds are AGAINST restaurant IPOs as long term investments. First day, however, I think it'll pop. |
| LEXICON GENETICS |
| IPO: | (LEXG:OTC) | Genomics company using proprietary gene trapping technology to discover novel genes. |
| Deal size: | 10,000,000 |
| Price range: | 22.00 - 24.00 |
| Led by: | JP Morgan |
| My take: I'm running out of ways to say this: Biotech IPOs are an unstable lot right now. Pay close attention to the comps as the week progresses. |
| LIVEPERSON |
| IPO: | (LPSN:OTC) | Provider of technology that facilitates real-time sales and customer service for companies doing business on the Internet |
| Deal size: | 4,000,000 |
| Price range: | 13.00 - 15.00 |
| Led by: | Chase H&Q |
| My take: I've seen this technology and it is pretty cool. Revs are small and losses are approaching eight digits. Dell (DELL Quote) and NBC -- a unit of General Electric (GE Quote) -- are involved. I like it for a few points right away. |
| METLIFE |
| IPO: | (MET:NYSE) | Leading provider of insurance and financial services to a broad spectrum of individual and institutional customers. |
| Deal size: | 179,000,000 |
| Price range: | 13.00 - 15.00 |
| Led by: | CS First Boston |
| My take: 3/10/00 Price narrowed from 14.00 to 24.00. Planning on offering 255,000,000 shares if stock prices at $19.00. Insurance is dead. This is obviously a great name, but I wouldn't own the deal. Maybe in the aftermarket when the stock finds its level. |
| NUMERICAL TECHNOLOGIES |
| IPO: | (NMTC:OTC) | Provider of proprietary technologies and software products that enable the design and manufacture of faster, smaller and more power efficient semiconductor devices. |
| Deal size: | 5,534,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | CS First Boston |
| My take: I like this deal. Hot group and a strong underwriter. |
| OPUS360 |
| IPO: | (OPUS:OTC) | An integrated, Web-based labor solutions provider. |
| Deal size: | 7,700,000 |
| Price range: | 9.00 - 11.00 |
| Led by: | Robertson Stephens |
| My take: This is a great market for labor solutions providers, but will the market buy this deal? Small revs and considerable losses. This is the only deal this week with selling shareholders. Small prem at best. |
| ORATEC INTERVENTIONS |
| IPO: | (OTEC:OTC) | Develops and markets innovative medical devices that use controlled thermal energy to treat spine and joint disorders. |
| Deal size: | 4,000,000 |
| Price range: | 11.00 - 13.00 |
| Led by: | Merrill Lynch |
| My take: Strong revenue growth and a recently improving bottom line. The fact that they are selling product and getting better and better traction may work to distinguish the deal. Have reasonable expectations. |
| RIGEL PHARMACEUTICALS |
| IPO: | (RIGL:OTC) | Post-genomics combinatorial biology company working on the development of faster ways to find novel drug targets. |
| Deal size: | 9,000,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Warburg Dillon Read |
| My take: Held over from last week -- I'm cold on this whole group. Watch the comps and use your head. |
| SABA SOFTWARE |
| IPO: | (SABA:OTC) | Provider of Internet-based solutions that enable businesses and governments to create and deploy global networks. |
| Deal size: | 4,000,000 |
| Price range: | 12.00 - 14.00 |
| Led by: | Goldman Sachs |
| My take: Networking software is still very much a killer group. This one rocks. |
| SANGAMO BIOSCIENCES |
| IPO: | (SGMO:OTC) | Involved in the development of novel transcription factors for the regulation of gene expression. |
| Deal size: | 5,000,000 |
| Price range: | 15.00 - 17.00 |
| Led by: | Lehman Brothers |
| My take: Who invited all of these biotechs to the party? I repeat: Watch the comps trade and adjust your IOIs -- or Indications of Interest -- accordingly. If you're betting on a turnaround, you're guessing. |
| STRATUS SERVICES GROUP |
| IPO: | (SERV:OTC SC) | New Jersey-based provider of temporary staffing and engineering services. |
| Deal size: | 1,300,000 |
| Price range: | 6.00 |
| Led by: | Hornblower & Weeks |
| My take: Our only contact with this firm is their answering machine. An unexplosive sector and a low price makes me hesitant on this deal. I believe that there are better places to be this week. |
| TANOX |
| IPO: | (TNOX:OTC) | Identifies and develops therapeutic monoclonal antibodies to address medical needs in the areas of immunology, infectious disease and cancer. |
| Deal size: | 7,000,000 |
| Price range: | 27.00 - 30.00 |
| Led by: | CIBC World Markets |
| My take: Talk about cloning -- these deals all look alike and the only thing we can do is watch them trade. |
| ULTICOM |
| IPO: | (ULCM:OTC) | Provider of mission-critical network signaling software for wireless, wireline and Internet communication services. |
| Deal size: | 4,250,000 |
| Price range: | 10.00 - 12.00 |
| Led by: | Lehman Brothers |
| My take: This is the stuff! Hot group, capable underwriters and (drumroll) PROFITS!!! Focus on wireless. This is where the money will be made this week. |
| VYYO |
| IPO: | (VYYO:OTC) | Provider of broadband wireless access systems used by telecommunications service providers. |
| Deal size: | 6,750,000 |
| Price range: | 13.00 - 15.00 |
| Led by: | B of A Securities |
| My take: 3/17/00 Changed from 4,250,000 @ 18.00 - 20.00. Big losses, but the promise of this sector makes it worth the risk. I am liking this one. |
