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Concentric, @Home file for IPOs

The two companies are the latest to step up to the trough as the initial public stock offering frenzy gets back in full swing.

The initial public stock offering frenzy among high-tech companies is back in full swing, with Concentric Network and @Home as the latest companies to step up to the public trough.

@Home filed for an IPO yesterday that would raise $56 million for the high-speed Net access provider, while Concentric Network filed for an offering that would rake in $29.9 million for the Internet service provider. Both companies are money-losers in cutthroat markets, which are also some of the fastest-growing tech fields.

The filings come in the same week that online bookstore Amazon.com and chip technology firm Rambus launched successful offerings that exceeded their target prices. Analysts have speculated that Amazon and Rambus could provide a partial impetus for some companies sitting on the fence to file for an IPO. One example: technology publisher CMP Media.

Analysts expect the trend to continue.

Along with executives who hold stock options, one venture capitalist that stands to cash in from this week's action is venture capitalist Kleiner Perkins Caufield & Byers. It is a major investor in @Home, Concentric, and Amazon.com. KPCB also provided start-up capital for Netscape Communications.

The company invests in a network of some 175 companies, many of which have partnerships, dubbed "Keiretsu." @Home's officers and stockholders include publishing scion William Randolph Hearst III.

@Home's registration filing with the Securities and Exchange Commission would float 8 million shares of common stock at a proposed $7 price.

The company, which would have 108.6 million shares outstanding under the offering, would give @Home a market value of $760.2 million. But there are risks.

"The @Home service is currently priced at a premium [$35 to $55 per month] to many other online services, and there can be no assurance that large numbers of subscribers will be willing to pay a premium for the @Home service," the filing said.

@Home has 5,000 paying subscribers, while its @Work business service is generating revenue from only five customers, the filing says. @Home had hinted at plans to go public, but the filing was not expected this soon.

The company, founded in March 1995, racked up net losses of $11.7 million for the quarter and $24.5 million for 1996, the filing said. It posted revenues of $806,000 for the quarter ended March 31 and $676,000 for all of 1996. @Home has been on a roll recently, despite a slow start.

Just last month, @Home sold 4.5 percent of the company for $48 million to Sun Microsystems, Motorola, Bay Networks, Rogers Cablesystems, and Shaw Communications.

@Home, which provides Net access via cable systems, already is owned by Tele-Communications Incorporated, Cox Communications, and Comcast, as well as Kleiner Perkins.

Underwriters for the deal are Morgan Stanley, Merrill Lynch, Alex. Brown, and Hambrecht & Quist.

The filing also calls for the underwriters to receive 1.2 million shares to cover over-allotments, bringing the potential number of shares to be floated at 9.2 million.

Concentric Network plans to sell 3 million shares, or more than 25 percent of the company, at a planned $10 to $12 each, valuing the company at up to $140.4 million.

Concentric will use the proceeds to expand its network and data center operations. The rest largely will be used for operating capital, to repurchase some outstanding common stock, and to offset losses.

Concentric posted a loss of $14.7 million in the first quarter of this year, compared with a $10.4 million loss in the like quarter a year ago, the filing said. The company lost $66.4 million for all of 1996, up from $22 million the previous year.

"Concentric Network Corporation's recurring losses from operations and working capital deficiency rates raise substantial doubt about its ability to continue as a going concern," accountant Ernst & Young said in a report that was included in the filing.

Despite the potential liabilities, Concentric cited the market's tremendous growth potential. The company predicted that the private-network and data market would expand to $22.7 billion in the year 2000 from $1.2 billion last year.

The filing did not list underwriters for the Concentric deal.