SAN FRANCISCO -- Depending on how you view things, the IPO market is either red hot or a game not worth playing.
Two tech IPOs debuted today, and early returns have been positive.
, which helps companies run Web sites, was up 3 11/16, or 22%, at 20 11/16. But the stock already was trading below its opening price of 22 3/4.
(NTIQ:Nasdaq), a non-Net play that delivers systems and application management solutions for
Windows NT-based systems, was up 2 3/4, or 21%, at 15 3/4.
While first-day success for recent IPOs generates the big headlines, some of the recent Net IPOs have hit the skids after big first-day run-ups.
, which traded as high as 105 when it debuted July 21, was recently trading down 5 1/8, or 1.6%, at 37 1/2.
was the darling of the IPO world when it debuted July 1, but has since fallen. After trading as high as 77 13/16 during its debut, it was recently down 1 1/2, or 3.6%, at 40 1/2.
Randall Roth, analyst with the
Renaissance Capital IPO Fund
, said momentum traders are to blame for the sharp declines that often follow the sharp run-ups, as the traders jump in and out from IPO to IPO.
"That method of investing has been driving some of these stock prices, so you're bound to disappoint when you go up so much the first day," said Roth. "A lot of those valuations are unsustainable."
Roth said overall market conditions, along with lack of "groundbreaking" issues, was contributing to the volatility many of the stocks have shown.
"I'm not saying we're not seeing quality, but we're not seeing the groundbreaking companies we did in the past," he said. "And I'm not taking a shot at these guys. It's hard to be groundbreaking."
Roth said the opening-day run-ups could diminish if it no longer becomes profitable to buy in on the first day.
"If people decide there's too much risk here, they'll pull back and so will the first-day gains, and that will be a healthy reaction," he said. He suggested investors wait a couple of days for the novelty of the IPO to wear off if they are seriously interested in a company and not just "capitalizing on the moment."
While today's IPOs are on the plus side, the same could not be said about the Internet sector as a whole. Net stocks slid into the weekend as traders sold into the earlier strength.
TheStreet.com Internet Sector
index was recently trading down 12.61, or 2.2%, at 549.83 after reaching a high of 568.57 early in the session.
Once again, the Net bellwethers were dragging the sector lower. After trading as high as 140 1/2,
was recently down 1 1/2, or 1%, at 135 1/2.
was down 3 3/8, or 3.4%, at 95 3/8, unable to hold above the 100 level.
had also slipped below the 100 level, down 2 9/16, or 2.5%, at 99. And
was off 4 1/4, or 5.3%, at 76 1/4. Earlier this week, four executives of priceline filed plans with the
to each sell 50,000 shares of stock in the company.