Martha Stewart Leads the IPO Charge This Week - TheStreet

Martha Stewart Leads the IPO Charge This Week

The markets are choppy, but several of this week's offerings appear to be making waves nonetheless.
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The equity markets may be all jittery ahead of Halloween, but the rush is on to get IPO companies out the door before the new millennium. This week 21 companies are expected to go public by Friday, but don't expect a typical week of dot-coms. Some of this week's companies offer profits.

All but eight IPOs this week are non-Internet offerings, says Richard Peterson at

Thomson Financial Securities

. And the best-looking deals are

Martha Stewart Living Omnimedia

and the

World Wrestling Federation

, expected to trade Tuesday.

But what sets this week apart from the others is more than just a shortage of dot-coms. Seven of the companies going out actually have positive balance sheets, which is something investors haven't seen much of in the IPO class of '99. Those not swimming in red ink include: Martha Stewart, WWF, retailer

Charlotte Russe

, boat manufacturer

Genmar

, packaging maker

Packaging Corp. of America

, software modem supplier

PC-Tel

and palm PC software company

Bsquare

.

Forget the cliches about

Hulk Hogan

and his body-slamming pals, this week belongs to Martha Stewart and her publishing company. Martha aims to raise more than $40 million through a 7.2 million-share offering managed by

Morgan Stanley Dean Witter

. After the close of trading Monday, the underwriters raised the offering price to $18 from a previous range of $13 to $15. Quite a show of confidence.

A good balance sheet is what Martha has in common with the brutes on WWF. For the six months ending June 30, Martha Stewart reported $14.2 million in net income, while the WWF reported $56 million in profits for the fiscal year ending April 30, 1999. WWF was priced at $17 a share after the market closed. "What it gets down to is that some of these companies weren't started two years ago in someone's garage," says Randall Roth, senior analyst with

Renaissance Capital's

(IPOSX)

IPO Plus Aftermarket Fund.

After all the excitement of the dot-coms, perhaps investors are seeking glamour and pizzazz. "The fact that these deals are even queued up to price shows that buyers have a perspective beyond the tech sector," says

Ben Holmes

, founder of the

ipoPros

Web site and a

columnist for

TheStreet.com

.

Last week, the

Dow Jones Industrial Average

took a 630-point dive and there was concern that some IPOs may get pushed back. But a survey of underwriting banks found only quiet confidence. Not one issue was pulled back and the offering prices remained firm.

Even the Net stocks on offer this week are generating raves. Analysts can't stop talking about wireless data service

Aether Systems

, storage router

Crossroads

and networking firm

Sycamore Networks

.

Sycamore has developed a promising fiber-optic network product, relying on the talents of alumni from the successful networker

Cascade

(bought by

Ascend

which was then acquired by

Lucent

(LU)

).

The Chelmsford, Mass.-based company expects to raise some $125 million by issuing 6.5 million shares to start trading Friday. At an estimated range of $18 to $20 per share, Sycamore would be valued at roughly $1.5 billion.

As with

Juniper Networks

(JNPR) - Get Report

and other high-profile debutantes in this sector, Sycamore's appeal doesn't lie in its profit and loss statement. Sycamore just started shipping product in May, and has booked total revenue of $11.3 million, all from one customer,

Williams Communications

(WCG) - Get Report

. Sycamore has lost $20.2 million since starting operations in February 1998.

Last week was hit-or-miss for IPOs. While the plummeting Dow didn't hold up

Women.com, three deals were pushed back. The three -- medical services firm

eMed Technologies

, Spanish-language communications company

Radio Unica Communications

and medical device maker

Vascular Solutions

-- are expected to go this week, but no dates have been set for pricing.

Still, they can all be thankful that Martha is going this week.