Strong Debuts for Netro, Wink as IPO Angst Lifts
The shares of four initial public offerings that debuted Thursday all rose, with two issues more than doubling, perhaps benefiting from a scarcity of companies willing to brave this volatile market.
San Jose-based wireless equipment maker Netro Corp. almost tripled to close at $23.50, up $15.50 on Nasdaq.
Alameda-based Wink Communications Inc., which makes systems that enable TV viewers to request information and purchase products directly from their sets, more than doubled to $35.69, up $19.69 on Nasdaq.
“I think the price of the stock reflects that the market is starved for good product,” said David Menlow of IPO Financial Network in Millburn, N.J.
LaBranche & Co., the first New York Stock Exchange broker-dealer specialist to list, got a muted reception but still managed to keep its gains. It closed at $14.50, up 50 cents on the NYSE.
Shares of Norcross, Ga.-based Headhunter.net Inc., an online recruiting and job-search service, also received a subdued greeting, closing at $10.19, up 19 cents on Nasdaq.
In recent weeks, investors have been selective in looking for firms perceived as having strong business models, venerable names or solid growth potential. Concerns about higher U.S. interest rates and an oversupply of deals in the IPO pipeline have dampened demand, with some deals flopping and others being shelved.
By bidding up Wink, investors placed their bets on the future of interactive television.
The company sold 4.75 million shares at $16 each, the top end of its expected range, through underwriters led by Donaldson, Lufkin & Jenrette and DB Alex. Brown.
Wink’s system allows advertisers, merchants and broadcast and cable networks to add an interactive component to traditional programs and advertisements.
With a click of the remote control device, viewers can purchase merchandise or request product samples, coupons and catalogs. They can also receive detailed program information such as news, sports and weather and play along with TV game shows or participate in polls.
The potential market is huge. The Direct Marketing Assn. estimates that about $91 billion was spent in 1998 on goods and services purchased through direct-response TV programming and advertising. Forrester Research Inc. said in a recent report that enhanced broadcasts will generate $6.2 billion in ad revenues by 2004.
Netro, which offers broadband wireless access systems, was aided by the recent buzz over wireless communications firms.
Merrill Lynch was lead underwriter of its $40-million IPO.
“There is strong global opportunity in this market,” said Jeannette Noyes, a research director at International Data Corp. “The growth of the Internet is only going to mean more broadband capacity is needed.”
LaBranche, the NYSE’s third-largest specialist firm, raised $147 million.
Headhunter.net allows companies to list job opportunities and review resumes posted on its site. It raised $30 million, less than its original $46-million plan.
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The initial public offering market, which has been rocky in recent weeks, showed surprising strength Thursday in the face of a down market as shares of four companies that debuted all rose. Two issues more than doubled, while two rose modestly.
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Company Ticker Close Change % Gain Netro NTRO $23.50 +$15.50 +193.8% Wink Communications WINK 35.69 +19.69 +123.1 LaBranche LAB 14.50 +0.50 +3.6 Headhunter.net HHNT 10.19 +0.19 +1.9
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Source: Bloomberg News
