On Thursday evening, Credit Suisse First Boston and comanagers BancBoston Robertson Stephens and Dain Rauscher Wessels will sit down with their client, Interwoven, to negotiate the final terms for its proposed initial public offering. The stock is expected to start trading on Friday.

The original terms called for 3 million shares to be priced between $10 and $12 each, but don't expect that to hold. According to informed sources, this deal is getting hotter, as is the rest of IPO market. After the offering, the company will have about 21.6 million common shares outstanding. Based on the proposed terms, Interwoven would have a market capitalization of about $240 million -- but expect more.

Through its principal product, TeamSite, Interwoven enables its clients to manage the content of their Web sites. To date, Interwoven has licensed its software products to over 85 customers, including BellSouth, Federal Express, General Electric, Yahoo, and others, according to the prospectus. Cisco Systems alone accounts for about 13 percent of Interwoven's revenues.

The company is experiencing rapid growth. It reported six-month sales ending June 30, 1999, of $5 million, up 464 percent from $886,000 the same period a year earlier. And its 1999 first-half revenues were 20 percent higher than the $4 million it reported for the full year of 1998. Because of the 25-day quiet period, the company's bankers are unavailable to issue their estimates at this time. What investors and stock traders want to know is, How will the IPO do in the aftermarket?

HISTORY REPEATSFor a clue to Interwoven's prospects, let's look at one of its closest competitors, Vignette, which came to market on February 19, 1999. With about the same financials -- 1999 first-half sales of $5.2 million, up 609 percent from $733,000 for the same period a year ago -- Vignette's IPO has been a huge success. Its shares were priced at $19, opened at $41, and closed its first trading day at $42.69, up 124.6 percent, a performance worthy of our IPO Hall of Fame (a list of companies whose stock closed up in first-day trading 100 percent or better from offer price). Since then, Vignette's common stock hit an April 12 high of $111.75 and presently is selling at about $101 a share, up 431.6 percent from its initial offering price. Although Vignette is perceived by many to be the leader in the market, its price suggests that the market is hot as a whole.

After all is said and done, when it comes to today's IPO market, it isn't a company's business model that's important, nor is its profit and loss statement. Each IPO is chum in the water for the day traders' feeding frenzy.

Most Internet deals that have a story to tell and a major underwriting team behind it will see its stock explode in the aftermarket. Somewhere, sometime, someplace, it will all end. But don't expect that to happen by Thursday night, when the offering terms of Interwoven will be announced.