Hambrecht & Quist
, the tech investment bank that's soon to be part of
, is ramping up its online presence.
On Monday, the San Francisco-based banking group will announce plans to start distributing its lead-managed IPOs and other equity offerings through online brokerage
, of Omaha, Neb. H&Q says it's talking to other online brokerages as well and could announce another partnership before the end of the year.
The move expands H&Q's network beyond hometown peer
, with which it has had an IPO and research agreement since 1997. The Schwab agreement isn't exclusive in nature, so it isn't affected by the Ameritrade deal, says David Krimm, H&Q's director of marketing. But for now, Schwab remains the sole distributor of H&Q research, Krimm says. Schwab officials couldn't be reached for comment.
"We're talking to Ameritrade about other sponsorships and other intellectual-property arrangements," Krimm says. Ameritrade officials weren't available for comment.
The deal may allow H&Q to beef up its IPO underwriting efforts which, while still strong, have been beset by competition. Prior to the acquisition announcement by Chase late last month, H&Q had led 17 IPOs valued at around $970 million this year, according to
Thomson Financial Securities Data
. While that's not far off its total in previous years, its share of the IPO business has dwindled to less than 5% from around 15% in 1996.
The IPO market has remained strong this fall despite the stock market's ups and downs. Led by a blistering tech and Internet sector, IPOs have raised $39 billion through the year's first three quarters. And with the number of deals in the pipeline, the total seems certain to pass 1996's record of $50 billion.
For Ameritrade, the agreement finally allows it to join the ranks of big online brokerages such as Schwab,
that offer IPOs to retail customers. And given Ameritrade's active trading base, demand is likely to be strong. Ameritrade has been talking about offering IPOs since early last spring.
"I think it's an important product for Ameritrade and other online brokers to have," says Steve Franco, an analyst at
U.S. Bancorp Piper Jaffray
. "The problem with the product is that you can never satisfy anyone. You have to manage the process very closely." (His firm was supposed to underwrite Ameritrade's recent secondary offering, but the deal fell through. Otherwise, the firm has done no underwriting for Ameritrade.)
E*Trade distributes deals from
, in which it has a stake. Fidelity began distributing
equity products earlier this year, and
distributes shares underwritten by the firm or its parent,
Donaldson Lufkin & Jenrette
Gregg Wirth contributed to this story.