First-quarter IPO frenzy to continue
Next week's schedule of initial public offerings is crowded with tech companies, although there are some indications that market volatility is taking its toll.
IPOs in the first quarter raised $23.7 billion, ranking second behind the record $29.3 billion raised in the fourth quarter of last year, said Richard Peterson, IPO analyst with Thomson Financial/Securities Data.
In addition, March captured the title of the second-busiest month ever, as newly public companies raised $12.4 billion. The $15.7 billion raised last November stands as the busiest IPO month.
First-day gains in the first quarter averaged 98 percent, an improvement over the previous quarter, when the average increase was 93 percent.
Yet upcoming public offerings may suffer from the broader market's recent volatility, according to analysts.
"Despite the fact that most of these issues were doubling on the first day, the after-market performance has collapsed," Peterson said. "Through yesterday, the average overall gain was 52 percent."
IPO shares are not the only ones declining. At the close of trading yesterday, the Nasdaq was down about 13 percent from its March 10 intraday high of 5,132. A drop of at least 10 percent is typically considered a correction.
As a result of the slide, CIBC World Markets said today it will delay the IPO of Camtek, an Israeli maker of inspection systems for quality control of circuit boards.
"We've seen a pullback in the Nasdaq, and that's flowing into the IPO market," Anurag Pandit, co-portfolio manager of the $2.5 billion John Hancock Small-cap Growth Fund, told Bloomberg News.
Still, some IPO shares have weathered the turmoil.
"The Nasdaq has been bouncing around, so it's been a tough go for some companies," said Jeff Hirschkorn, senior IPO analyst with IPO.com. "But one deal that stands out (this week) despite the Nasdaq's tumble is Websense. They priced at $18, well above their range, and (rose) 165 percent on their first day,"
Websense provides software that allows companies to monitor their employees' Net use.
Next week two wireless deals--Vyyo and i3 Mobile--and an online health company called HealthStream top the list of nearly two dozen planned IPOs that could raise a total of $4.4 billion.
Vyyo seeks to raise $101 million based on the high end of its $13 to $15 pricing range and the 6.75 million shares it plans to sell, according to Securities and Exchange Commission filings. Previously, the company planned to raise $85 million by selling 4.25 million shares for up to $20 each.
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Vyyo supplies broadband wireless access systems to companies that sell wireless, high-speed data connections to businesses and consumers.
"Telaxis is a competitor, and they went public earlier this year. They're one of the top performers for the quarter, pricing well above (their) range," Hirschkorn said. "They priced at $17 and gained 179 percent on their first day. That's a good example that Vyyo will do well."
Vyyo generated revenue of $4.2 million for the year ended Dec. 31, up from $2.5 million the previous year. Its loss swelled to $43.6 million for the year, compared with a loss of $7.7 million a year earlier.
Another wireless company, i3 Mobile, is expected to capture investors' interest next week, Hirschkorn said. i3 Mobile delivers personalized information, such as stock quotes and sports news, to devices such as cell phones and personal digital assistants.
The company has agreements with 15 wireless operators that together cover more than 55 percent of North America's wireless phone users, Hirschkorn said. He noted that MCI WorldCom is one customer that will hold a 5.3 percent stake after the IPO.
i3 Mobile generated revenues of $1.7 million for the year ended Dec. 31, up slightly from $1.4 million the previous year. The company posted a loss of $10.3 million for the year, up from a loss of $2.9 million a year ago.
The company plans to raise up to $70.4 million based on the high end of its $14 to $16 pricing range and 4.4 million shares it will sell, according to SEC filings. It plans to trade under the ticker "IIIM." Deutsche Banc Alex Brown is the lead underwriter.
HealthStream is expected to garner strong investor interest, as the company raised its pricing range to $11 to $13 a share from $9 to $11. With the 18 percent increase, the company hopes to raise up to $65 million, based on the 5 million shares it will sell.
The company, which provides 
online health care education to professionals, operates in a market that generates billions of dollars, analysts said.
Although HealthStream's industry already is populated with online education competitors, such as Skillsoft and DigitalThink, analysts said there is room enough for the players.
"Corporate training in the U.S. is a $100 billion business, so these companies can coexist," said Greg Cappelli, an analyst with Credit Suisse First Boston. "This is an industry where only 5 percent of the training is done on the Web, but that's expected to grow."
He added that it will likely be more than two years before the online education market becomes crowded.
HealthStream generated pro forma revenues of $7.2 million for the year ended Dec. 31 and posted a loss of $9.8 million. The company, which is being underwritten by Robertson Stephens, will trade under the ticker "HSTM."
Bloomberg News contributed to this report.