Despite recent jitters on Wall Street, GeoCities raised the price for its initial public stock offering to $17--more than 20% above the original estimate.
The Santa Monica firm, which gives free World Wide Web home pages to about 2 million "homesteaders" and makes money by selling advertising on those pages, originally planned to go public at between $12 and $14. The company said in a Securities and Exchange Commission filing Monday that it would lift the price range to between $14 and $16, and later in the day boosted the price again because of investor demand.
GeoCities will sell 4.75 million shares--a 15% stake--to raise $80.8 million. The $17-per-share price gives the company a market value of $538 million, and that could rise even higher once the shares begin trading on Nasdaq today.
By pricing as high as $17, GeoCities is betting that investors are still hungry for risky Internet stocks even in the wake of last week's turbulent trading.
"It looks like it's going to be a blockbuster with all the buzz going on," said market analyst Tom Taulli of IPO Monitor in Calabasas.
Investors and analysts looking for the next red-hot Internet stock have focused their attention on GeoCities, a 3-year-old company that took in $4.6 million in revenue last year but ended up $8.9 million in the red.
Part of GeoCities' appeal is its novel business strategy of giving away space for personal home pages as a way to acquire content for free, then grouping them into categories such as sports, arts and business and selling targeted advertising.
GeoCities is also being propelled by the mania for Internet stocks, which last month sent shares of Dallas-based Broadcast.com soaring 248% on their first day of trading.
After the Dow Jones industrial average tumbled 299 points last Tuesday, about a dozen firms delayed their IPOs, and analysts speculated that GeoCities might follow suit. But with demand for its shares so strong, the company had little reason to do so.
GeoCities will trade under the ticker symbol GCTY. Goldman, Sachs & Co. is the lead underwriter.
Bloomberg News was used in compiling this report.