When the shares are sold to institutional investors this week, AOL Latin America is expected to raise $425 million, making it the biggest deal in a crowded calendar of 38 offerings that could raise a combined $3.7 billion.
AOL Latin America, which is based in Fort Lauderdale, Fla., offers Spanish- and Portuguese-language versions of AOL Instant Messenger, Buddy Lists, email and chat rooms. It is a joint venture with the Cisneros Group, a media, entertainment and telecommunications leader in Latin America.
AOL Latin America faces competition from at least four companies, three of which have been roughed up by Wall Street in recent months.
Shares of StarMedia have dropped 7 percent to $14 from their May 1999 IPO price of $15; El Sitio shares have fallen 72 percent to $4.44 from an initial price of $16 in late 1999; and Yupi Internet withdrew its planned offering in April because of unfavorable market conditions. Only Terra Networks has performed well, with its shares trading around $37, up 175 percent from their $13.53 IPO price in late 1999.
"This tells you that the market and the landscape (for Latin American ISPs) is pretty hard to get through right now," said Jeff Hirschkorn, senior market analyst for IPO.com.
Eli Neusner, a senior analyst with mutual fund company MetaMarkets.com, said his company will not buy into AOL Latin America because "it's too volatile, too competitive. And the number of Internet users in Latin America is not going to grow as rapidly as some of the more bullish analysts may be thinking."
AOL Latin America reported losses of $51.2 million for the nine months ended March 31, nearly 10 times its $5.2 million in revenues. In its prospectus filed with the Securities and Exchange Commission, the company said it spent nearly $10 million to launch service in Brazil and to prepare for its launches in Mexico and Argentina.
The company plans to raise an estimated $374 million through the sale of 25 million shares at a range of $15 to $17. The money will be used for marketing and brand development, as well as for improving telecommunications network capacity in Latin America, according to the company's prospectus.
After the offering, AOL will own 39 percent of AOL Latin America, which will trade on the Nasdaq Stock Market under the ticker symbol "AOLA." Salomon Smith Barney is handling the sale.
SpeechWorks, a speech software company whose clients include Apple Computer, E*Trade and MapQuest.com, plans to sell 4.8 million shares at a range of $17 to $19.
The Boston-based company reported $5 million in revenues in the first quarter of 2000 and a net loss of $600,000. AOL has agreed to purchase $5 million worth of the company's shares. SpeechWorks will trade on the Nasdaq under the ticker symbol "SPWX." Chase Hambrecht & Quist will handle the sale.
CrossWave Communications, which offers broadband data and infrastructure services, plans to sell 17.4 million American depositary shares (ADS) at a range of $12 to $14.
The Tokyo-based company is jointly owned by Sony, Toyota Motor and Internet Initiative Japan. After the offering, the three companies will own an 83 percent stake. CrossWave plans to trade on the Nasdaq under the ticker symbol "CWCI." Goldman Sachs will handle the sale.
Giganet, which makes wireless equipment for service providers, plans to sell 5 million shares at a range of $12 to $14.
The Israel-based company reported revenues of $4.5 million in 1999 and a net loss of $6.3 million, according to IPO.com. Giganet will trade on the Nasdaq under the ticker symbol "GGNT." Morgan Stanley Dean Witter will handle the sale.
OPNET Technologies, which makes software for network optimization, plans to sell 4 million shares at a range of $12 to $14.
The Washington, D.C.-based company reported $12 million in revenues for 1999 and a net loss of $207,000, according to IPO.com. The company will trade under the ticker symbol "OPNT." Morgan Stanley Dean Witter will handle the sale.
Convergent Group, which provides e-business consulting services for local governments and utilities, plans to sell 5 million shares at a $7 to $9 range. Initially, the Englewood, Colo.-based company planned to sell 6 million shares at a range of $8 to $10.
Convergent reported second-quarter revenues of $22 million and a net loss of $600,000. The company will trade on the Nasdaq under the ticker symbol "CRGP." Robertson Stephens will handle the sale.
For a complete listing of this week's technology IPOs, visit CNET Investor.