Goldman Sachs Sets the Pace With State IPOs
In the business of launching new California stock offerings, Goldman, Sachs & Co. has the golden touch this year.
The New York-based brokerage has lead-managed four initial public offerings from California companies since Jan. 1, and the average gain among the four issues is 139%, according to Securities Data Co.
That figure has been pumped up by the red-hot performance of Inktomi, the 2-year-old Internet software firm based in San Mateo, which Goldman brought public on June 10 at $18 a share. The stock, which has traded as high as $88.75, closed at $67.50 on Friday, for a 275% gain from the IPO price.
With that track record, some eager investors now just look for two words when eyeing an IPO: “Goldman” and “Internet.”
But Goldman also has had a relative disappointment in Aurora Foods, which went public June 25. The San Francisco-based owner of such food brands as Duncan Hines and Aunt Jemima was priced at $21 a share, and has risen just 5% to $22 as of Friday.
Morgan Stanley Dean Witter’s three California offerings this year also have performed well, on average, with a 127.9% gain.
While Goldman and Morgan Stanley are the performance leaders, Deutsche Bank is tops in sheer number of California deals, with six IPOs so far in 1998. Those stocks have risen 75.9%, on average, from their offering prices, Securities Data said.
One of Deutsche’s big hits: Software.net of Irvine, an online reseller of computer software. The stock was brought public at $9 a share on June 17, and has gained 115%, to $19.38 as of Friday.
Among underwriters with three or more California IPOs this year, NationsBanc Montgomery Securities’ offerings have fared worst, with a 12% average gain.
Meanwhile, the five offerings from BancAmerica Robertson Stephens have logged a 36.2% average gain. Robertson Stephens now is owned by BankBoston, which bought the brokerage from BankAmerica after NationsBank and BankAmerica agreed in April to merge.
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While there have been no IPOs from California-based companies so far this month, deals on the horizon include Del Monte, Echelon, Team Communications and Golden State Vintners.
And in August, the eagerly anticipated GeoCities, a Santa Monica-based Internet services sompany, is scheduled to go public.
“The IPO players are hiding in the corner waiting to pounce on certain issues,” said David Menlow, president of IPO Financial Network in Springfield, N.J. “We are setting the stage for a very strong post-Labor Day period through the end of the year.”
Broadcast.com, a Dallas-based broadcaster of live audio and video programs on the Internet, could be the spark. Its stock rose 248% on its first day of trading Friday--a record for any IPO--leading investors and market specialists to predict strong performance from other IPOs in the next few weeks.
In other IPO news last week, Sunnyvale-based PointCast, a leading broadcaster of personalized news and information for business consumers over the Internet, pulled its expected $37.5-million IPO amid speculation it is looking for an alternative source of capital.
Meanwhile, EBay, the San Jose-based operator of a Web site on which people buy and sell goods in an online auction, filed to go public in an estimated $64.4-million offering.
In September 1995, EBay set up a market--https://www.ebay.com--where buyers and sellers can settle their own trades on everything from antique collections to stamps. The company calls the market a person-to-person auction.
EBay was founded by Chairman Pierre Omidyar, 31, a former engineer with General Magic, a mobile communications technology company, according to the filing.
The company reported net income of $348,000 on revenue of $14.9 million in the first half of this year, compared with income of $486,000 on revenue of $1.7 million for the same time period last year, the company said in its Securities and Exchange Commission filings. Goldman Sachs is lead manager on the deal.
Also last week, Seagram revealed more details on its sale of Tropicana Products to the public for as much as $2.86 billion, less than Chairman Edgar Bronfman Jr. had expected. Seagram is trying to raise money to pay for its pending acquisition of PolyGram.
In its SEC filing, Seagram said it plans to sell 124.5 million shares in the world’s biggest juice company, or 95% of its common stock, at between $21 and $23. If the shares sell for $23, the proceeds would be 20% less than the Bradenton, Fla.-based Tropicana had estimated in a June SEC filing.
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Debora Vrana covers investment banking for The Times. She can be reached by e-mail at debora.vrana@latimes.com
