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KPMG Consulting's IPO Offers Hope for Market

February 09, 2001|From Times Staff and Wire Reports

Is the IPO market showing signs of life?

The languishing market for initial public offerings received a much-needed boost Thursday when KPMG Consulting's IPO of more than $2 billion surged 30% in first-day trading.

Not only the largest IPO so far this year, but the best performing in terms of first-day gains, the stock sale made KPMG Consulting (ticker symbol: KCIN) one of the world's largest technology companies. KPMG Consulting, which was split last year from accounting firm KPMG, helps companies design Web sites and computer networks, and integrate e-commerce into their operations.

More than 65 million shares traded in heavy volume, soaring as high as $24.25 from the offer price of $18 a share. The stock closed at $23.48, up $5.48, on the Nasdaq market Thursday.

"This tells us that there still is an IPO market," said Irv DeGraw, research director at WorldFinanceNet.com, a financial information provider. "It's just that it's a very selective market and you'd better have certain characteristics if you want to play this year."

The McLean, Va.-based consulting firm, which employs more than 9,000 people, priced to sell 112.5 million common shares at $18 per share late Wednesday, at the top of its price range of $16-$18.

In another good sign for the IPO market Thursday, Seattle Genetics Inc. raised the estimated price of its upcoming IPO to $11 to $13 per share from $10 to $12, bucking a recent trend of lower price ranges and lower shares in the IPO market this year.

Seattle Genetics, a Bothell, Wash.-based researcher of cancer-fighting drugs whose backers include Microsoft Corp. co-founders Bill Gates and Paul Allen, is expected to price next week.

Nasdaq has approved its proposed symbol of SGEN. The company hopes to raise about $77 million.

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