Wall Street Invites Spain, Korea IPOs to Internet Party
Those looking for speculative investments aren’t limiting themselves to China.
Spain’s Terra Networks (ticker symbol: TRRA) and Korea Thrunet Co. (KOREA) led Wednesday’s Wall Street debuts higher as U.S. investors clamored for foreign Internet offerings, hoping to ride the online wave as it swells overseas.
“Foreign markets aren’t heavily penetrated by any major U.S. [Internet] players,” said Ned Brines, co-manager of Phoenix Engeremann Aggressive Growth fund and Phoenix Engeremann Growth fund.
“We have seen how it worked here and we are going to see something comparable in these other markets,” he added. “Why not take the opportunity where there isn’t an established player and there’s a lot of upside?”
Terra became Europe’s biggest listed Internet company after it raised $818 million globally, including the 23.5 million shares offered to strategic partners for $315 million.
Shares of the company that offers Internet access and content to Spanish- and Portuguese-speaking customers rose 185% to close at $38.25 on Nasdaq after its $13.41-per-share offering.
Seoul-based Thrunet, the first Korean firm to be listed on Nasdaq, raised $181.8 million after pricing 10.1 million shares at $18, above its expected price range.
Its shares surged $17.06, or 95%, to $35.06. With its easy-to-remember ticker symbol, the company may have borrowed a page from Hong Kong-based China.com Corp. (CHINA), which has jumped fivefold since its July debut.
“I love all these stocks because there’s a shortage, but Korea is probably the most advanced in Asia in terms of telecom infrastructure. Korea’s Internet penetration is growing very quickly,” said Eric Ritter of Driehaus Mutual Funds.
Both of Wednesday’s hot foreign issues had well-known backers. Terra is a spinoff from Spanish telecom operator Telefonica, which holds a majority stake. Microsoft Corp. is a Korea Thrunet shareholder and has signed a pact with the Internet firm.
“I think it’s critical to understand that this is a very narrow focus for the market. It is not a sign to open floodgates for any international offering,” said David Menlow, president of IPO Financial Network. “[The Internet] is an untapped market [there] and these are companies that are at the top of their field that are coming to market.”
The day’s domestic technology and Internet-related new issues on Nasdaq also gained, including:
* Virata Corp. (VRTA), which rose $12.56, or 90%, to $26.56 after pricing 5 million shares at $14 and raising $70 million. The Santa Clara, Calif.-based company makes digital subscriber line communications chips and software.
* IManage Inc. (IMAN), which climbed $13.63, or 124%, to $24.63 after pricing 3.6 million shares at $11 and raising $39.6 million. The San Mateo, Calif.-based company’s software combines graphics, video, text and audio in one platform.
* Rainmaker Systems Inc. (RMKR) rose $10.50, or 131%, to $18.50 despite pricing at the bottom of its expected range. The Scotts Valley, Calif.-based company, which manages customer relationship services, sold 5 million shares at $8, raising $40 million.
* And Web Street Inc. (WEBS) gained $1.38 to $12.38 after selling 3.75 million shares at $11, raising $41.3 million. The Deerfield, Ill., company is the first online broker to go public since June.
