IPO Outlook Strong, but Focus Still on the Internet
The market for initial public offerings looks strong so far this year, especially for several upcoming deals by California-based companies, market specialists say.
California IPOs expected to be sold in the next few weeks include Studio City-based GenesisIntermedia.com Inc., a multimedia marketing company; Los Angeles-based Digital Lava Inc., a video publishing software firm; Sunnyvale-based NVidia Corp., a developer of graphics processors and related software; Burlingame-based Serena Software; Los Angeles-based Korn/Ferry International, an executive search firm; and Carlsbad-based Invitrogen Corp., a biotech firm.
"The market is in better shape as far as trying to get deals done, but the focus is still too narrow, with the Internet dominating the landscape," said David Menlow, president of IPO Financial Network Corp., a New Jersey data tracker.
Indeed, coming on the heels of last year's market for IPOs, which included some of the biggest deals in history, billions of dollars in IPO deals are expected in the first quarter. A large portion of those will be from tech-related firms, analysts said.
Last week's blockbuster--and the year's first IPO--was a deal by San Francisco-based MarketWatch.com Inc., which was priced at 2.75 million shares at $17 each Thursday, raising $46.8 million through lead underwriter BT Alex. Brown Inc.
The company, which operates a financial news Web site, opened for its first day of trading on Nasdaq at $90 a share, as more than 6 million shares changed hands in the first 45 minutes of trading. The stock closed at $97.50, after trading as high as $130 and as low as $69. More than 9.7 million shares changed hands.
MarketWatch.com. provides Internet-based, real-time news and is licensed to use the CBS name, logo and news content. It also benefits from a marketing agreement with CBS, which significantly boosted investor interest in the deal.
Other expected IPOs this week include an offering from GenesisIntermedia.com, with 100 employees, which plans to raise about $18 million by selling shares at $9 each through Millennium Financial Group. Formed in 1993 to produce TV infomercials, much of the company's revenue comes from the "Men Are From Mars, Women Are From Venus" series by author John Gray.
"Because of the .com in this name, I'm looking for the Internet wave to take this one up too," Menlow said. "As far as after-market sponsorship and when the smoke settles, it's anyone's guess. The stock may have difficulties retaining its prices."
