First-Day Pops: Fewer and Not Quite as Loud

Ben Holmes has the market covered: Sundays: This Week in IPOs Tuesdays: This Week's Secondaries Wednesdays: Upcoming Lockup Expirations Fridays: The Quiet Period

Last week six IPOs managed to get themselves priced. This, despite the fact that Friday was a market holiday. On average, these six deals posted a 9.6% first-day gain, based on the closing price of the stocks. Compare this to the 35.7% average first-day performance from the previous week's nine deals. What does this tell us?

Well, two data points hardly add up to a trend, but we can say that fewer deals priced in the last two weeks than in any other two-week period since the beginning of the year. The decline in this week's first-day premiums is dramatic, but, as I said, two data points make for a pretty inconclusive chart.

The signal I was looking for this week was whether or not the market would step up and bid for IPOs from profitable companies. Last week, four of the six deals priced carried positive numbers in their net income columns (they were profitable). Only one of those traded to any significant premium. I guess profits are not the chicken soup cure someone thought they would be. Oh well, I live, I learn.

This week is light. Many of the syndicate departments have put their calendars on a blanket TBA (To Be Announced) status. As it stands, we show 11 deals slated to price this week. Come Monday, there's a chance that a few more names will be added to the queue.

Let's take a look at the deals:

ACTIVEWORLDS COM INC
IPO:	(AWLD:OTC SC)	Provider of Internet software products and services.
Deal size:	1,200,000
Price range:	5.00
Led by:	HD Brous & Co.
My take: No-name underwriters and a cheap share price. No thanks. 1 unit = 1 share of common + 1 series B redeemable common stock. Trades on the OTC Bulletin Board under AWLD.

AT&T WIRELESS
IPO:	(AWE:NYSE)	One of the largest wireless service providers in the U.S.
Deal size:	360,000,000
Price range:	26.00 - 32.00
Led by:	Goldman Sachs
My take: This is an instant institutional darling. The size of this deal is equal to a third of the volume on the NYSE on a big day -- huge. Hard to say where it will be valued, but like it or not, the deal works.

BIRCH TELECOM INC
IPO:	(BRCH:OTC)	Integrated communications provider.
Deal size:	12,500,000
Price range:	15.00 - 17.00
Led by:	Lehman Brothers
My take: Kravis is the major shareholder. Revenues are growing dramatically, but losses are matching this trend. Plenty of underwriters to aid in marketing this CLEC. I'd say a small premium at best.

CAMTEK
IPO:	(CAMT:OTC)	No description available.
Deal size:	2,800,000
Price range:	13.50 - 15.50
Led by:	CIBC World Markets
My take: 4/11/2000 reduced from 16.00 - 18.00. Non-EDGAR filing. I have almost no info on this deal and currently am voicing no opinion. This deal is dragging from week to week and I'm starting to wonder why.

CLIENTLOGIC
IPO:	(CLGC:OTC)	Provider of integrated customer relationship management services to e-commerce and technology companies.
Deal size:	13,300,000
Price range:	14.00 - 16.00
Led by:	Salomon Smith Barney
My take: 3/29/2000 shares decreased from 20,000,000 and increased from 9.00 - 11.00. They have big brand, big revenues and big clients. It looks like a premium deal to me.

DIGITALWORK COM
IPO:	(DWRK:OTC)	Provider of Web-based business services to the small business market.
Deal size:	6,250,000
Price range:	11.00 - 13.00
Led by:	Lehman Brothers
My take: Suddenly improving revenues, but a worsening bottom line. Draper is involved (for what that's worth) and I trust these underwriters. What I don't know is how the market will take to B2B IPOs this week. I'll venture a premium of a couple of bucks.

INVENTA TECHNOLOGIES
IPO:	(INVA:OTC)	Internet professional services firm providing B2B e-commerce solutions to Global 2000 companies.
Deal size:	3,500,000
Price range:	11.00
Led by:	Lehman Brothers
My take: Just like the Internet brand/image-building firms, these technology consultant firms are much needed; the problem is in the balance sheet. Revenues are ramping nicely, but losses are huge. This is not the market for a deal like this.

METAWAVE COMMUNICATIONS
IPO:	(MTWV:OTC)	Provider of smart antenna systems.
Deal size:	6,250,000
Price range:	11.00 - 13.00
Led by:	Merrill Lynch
My take: Wireless infrastructure is a favorite theme in here. The client list is short, but the names are well-known. Hardware technology deals have worked well recently. Combine that with a strong group and I'd call it an up-deal. Let's hope that the market agrees.

PRAECIS PHARMACEUTICALS INC
IPO:	(PRCS:OTC)	Fully integrated drug discovery and development company with a lead product for the treatment of hormonally responsive prostate cancer.
Deal size:	8,000,000
Price range:	15.00 - 17.00
Led by:	Salomon Smith Barney
My take: This one has been hanging around for a few weeks -- I'd like to see it price just to see how a profitable biotech deal will trade in this market. Yes, you heard me correctly. Net income was $9 million on $61 million in revenues for fiscal year 1999. Pretty cool.

VIROLOGIC INC
IPO:	(VLGC:OTC)	Biotechnology company developing and marketing innovative products to guide and improve treatment of viral diseases.
Deal size:	5,000,000
Price range:	14.00 - 16.00
Led by:	CIBC World Markets
My take: Here's a drug-discovery deal with losses almost 19 times its revenues. In this environment? It doesn't stand a chance.

WHEREVER.NET HOLDING CORP
IPO:	(WNET:OTC)	Telephony services and products.
Deal size:
Price range:	tba
Led by:	Merrill Lynch
My take: Non-EDGAR filing. I have no opinion.

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