Wall Street traders may be yawning at the ticker tape at the corner of Broad and Wall Streets, saying the summer doldrums have arrived early, but investment bankers don't see it that way. They see a gold rush in the bulging IPO calendar for the week of June 28.
Nineteen bankers, from Allen & Co. through U.S. Bancorp Piper Jaffray, expect to price 21 IPOs and look to raise $1.7 billion for corporate America.
Slightly over half of the week's calendar -- 11 deals -- are Internet and Internet-related offerings. Most of these companies are based more on a concept than on a balance sheet, however. Nine of them reported revenues last year of less than $10 million each. Nevertheless, whatever lightning and thunder comes rolling off Wall Street's syndicate desks will be from the Internet side of the IPO calendar.
However, the underwriting world doesn't live by dot-com alone. As an example, among the other deals on the calendar are three health care new issues and three financial companies, including MCM Capital Group, which uses what it calls a "friendly, but firm approach" to collect on delinquent credit card accounts.
PICKS OF THE WEEKCommerce One provides e-commerce solutions that connect buyers and suppliers of business goods and services into Internet trading communities, a hot area on the IPO calendar. The company has former strategic partnerships with British Telecom and Nippon Telegraph and Telephone (NYSE: NTT). Its shareholders include Canaan Partners and Morgan Stanley Venture Partners. The company is located in Walnut Creek, California. IPO handicappers think the IPO is good to rise several points after being priced.
San Francisco-based Digital Island provides corporate e-business networks over the Internet. The company operates through four data centers located in Honolulu, London, New York City, and Santa Clara, California, and serves clients in 17 countries. Among the company's customers are Cisco Systems, ETrade, National Semiconductor, and others. This IPO could be one of the week's top performers.
E-Loan is an online provider of mortgages that gives consumers the ability to obtain the most suitable mortgages from a wide array of lenders at substantial savings. The company's Web site has over 50,000 products provided by more than 70 lending sources. The company is located in Dublin, California. Had the deal come to market a month or two ago, the IPO would likely have opened to a huge premium of $10 a share or more, but that time has passed. Now, it could be up about a dollar or two.
Musicmaker.com is an e-commerce provider of customized music CDs over the Internet. People can create their own CDs using the company's music library. It currently lists over 150,000 licensed song titles. The company is located in Reston, Virginia, and you've got to like its Nasdaq symbol: HITS. Handicappers see the IPO starting to trade at a $2 to $3 a share premium over its offering price.
Network Plus bundles local telephone, Internet, data transfer, and other services with its long-distance services. The company recently started offering digital subscriber line (DSL) to its subscribed base of over 40,000 customers. This is another hot sector in the Internet and telecommunications market. Network Plus is based in Quincy, Massachusetts. Look for the IPO's price to explode when it starts trading.
ShowCase, located in Rochester, Minnesota, provides fully integrated, end-to-end, business intelligence solutions for IBM AS/400 customers. The company counts among its 2,000 customers Abbott Laboratories, Tiffany, United Rentals, and others. For the fiscal year ended March 31, 1999, ShowCase had revenues of $35.5 million, up 49.5 percent from a year ago; 1998 revenues were up over 30 percent from 1997. Due to the quiet period, there are no available earnings per share estimates, but the company could move into the black over the next few quarters. The IPO is expected to jump to an opening premium of about $3 a share.