Cyber IPO : Checkfree, Provider of On-Line Commerce Services, Hits Street

Investors will be offered a chance to get in on Wall Street’s hottest sector today when Checkfree Corp., a provider of electronic commerce services, goes public with a 6-million share offering.

“This is a very hot area and everyone is really excited about companies that have products going to the Internet,” said Linda Intini, vice president at Citibank Global Asset Management.

Checkfree designs, develops and markets services enabling electronic payments and collections and financial management on the Internet.

Its Checkfree Wallet, introduced in August, allows customers to make electronic payments for goods and services acquired on-line.

Demand for the initial public offering is expected to be strong, and underwriter Lehman Bros. raised the price range of the offering to $16 to $18 on Wednesday, from $14 to 16 on Tuesday.

The shares were priced at $18 apiece Wednesday night, the top end of the expected range.

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“We expect it to be a hot deal,” said Kathleen Smith, analyst at Renaissance Capital Corp. in Greenwich, Conn. “The other companies that have come out in the electronic commerce business have done well.”

Harbinger Corp., which also supplies software and services for electronic commerce, went public at $12 a share last month and is currently trading near $14. Spyglass Inc., which provides Internet products and services, was launched at $17 per share in June and has soared to about $39.

Netscape Communications Corp., maker of popular software for browsing the Internet, went public Aug. 9 in one of the hottest initial public offerings in history. Its IPO was priced at $28 but the shares soared to $58 and are currently at about $63.

“There is the momentum of the other comparables, and Checkfree in particular has established itself as one of the leading processors of electronic bill payments for PC users,” Smith said.

“More and more people are getting used to on-line activity and they will be doing more electronic transactions on-line. Checkfree is well positioned to gain from the growth of electronic commerce,” she said.

But Smith added that recent market weakness--high-tech issues took a beating Wednesday--may dampen the excitement. “There is one caveat: There is a lot of selling pressure in the technology group.”

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David Menlow, president of IPO Financial Network Corp., expects the stock to open three to five points higher than the offering price, provided the broad market holds up and not too many secondary issues are priced. The Springfield, N.J.-based company predicts the opening premiums of initial public offerings.

“The prospects of business in financial transactions in the electronic commerce market is the buzzword,” Menlow said.

Analysts said investors may also be worried about competition from Intuit Inc., the maker of the popular Quicken personal finance software.

Checkfree had a marketing agreement with Intuit that ended in July under which buyers of Quicken received marketing materials on Checkfree’s services. Intuit is now planning to offer on-line home banking and financial services itself.

Checkfree will offer 3.76 million of the 6 million shares to be sold and stockholders will offer the remainder. The company, formed in 1981, intends to use the proceeds for general corporate purposes, including capital spending and working capital. A portion may also be used to buy or invest in complementary businesses, services or products.