The Cutting Edge: COMPUTING / TECHNOLOGY / INNOVATION : Netscape IPO Has Investors in a Frenzy

In a year of hot initial public offerings, Netscape Communications Corp. is expected to sizzle when it hits the stock market today. That’s because Netscape is in the hottest business around--the Internet global computer network.

One of its founders created the first browsing program that lets Internet users navigate the network. Its browsing software is the most widely used tool in cyberspace. Brokers said they are being flooded with calls about the stock offering.

Interest is so high that the underwriters Monday nearly doubled the asking price on the issue to $24 a share, then raised it to $28 on Tuesday. That compares to a target price of $12 to $14 a share when the offering prospectus was first issued July 17. The number of shares to be sold has been raised to 5 million from 3.5 million.

“I think the announcement of increasing the pricing and size of the offering gives a strong indication of what the interest is--nothing short of phenomenal,” said analyst Forbes Tuttle, director of research at the IPO Value Monitor.

“That leads to a market capitalization of about $950 million for a company with only two quarters of operating revenues,” Tuttle added. He calculated that amount by including a 15% overallotment underwriters have available and stock options that are exercisable with the offering.

“They’ll be making more money on interest income than they will from operating income,” Tuttle said.