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F5 prices at low-end of range

F5 Networks Inc. (proposed ticker: FFIV) felt the brunt of the IPO glut this year, pricing at $10 a share for its 3 million share offering, the low end of its range.

There's been more than 60 Internet-related IPOs so far this year, up from the 42 from all of last year, according a New York Times "Market Watch" in May. Investors may be getting a little "dot.com" dizzy.

F5, based in Seattle, Wash., makes extranet software - extranets sit above a company's servers and monitor the integrity of its connections as well as the content that flows through its servers on its Web sites. F5 has more than 290 customers, which include Web host Exodus Communications Inc. (Nasdaq: EXDS), Internet backbone provider PSINet Inc. (Nasdaq: PSIX) and MCI WorldCom Inc. (Nasdaq: WCOM).

Hambrecht & Quist led F5's issue, assisted by BancBoston Robertson Stephens and Dain Rauscher Wessels.

Cisco Systems Inc. (Nasdaq: CSCO) lines up against F5's network product called 3DNS as well as F5's Big/IP server management product. Computer Associates International Inc. (NYSE: CA) Unicenter and Hewlett-Packard Co.'s (NYSE: HWP) Open View vie for customers with the company's Global Site content management.

Though Cisco is F5' competition, the two companies work with one another. Cisco uses Big IP technology in its SmartSwitch router. In an interview with F5 management in January, the company said it wouldn't be averse to listening to a takeover offer from the likes of Cisco, which is known for swallowing companies that have technology it lacks.

Encyclopedia company Britannia Holdings Ltd., which uses 3DNS and Big IP, holds a stake in the company.

Like many Internet-related ventures, F5 has been in the red from its inception. From the company's launch in July 1996, F5 has lost $330,000 on $2,000 in sales in 1996. Last year the company lost $3.66 million on $4.88 million in revenue. In the six month-period ending in March, F5 lost $5.2 million with $6.45 million in sales.

In related news: Online Resources & Communications Corp.'s (Nasdaq: ORCC) 3.1 million share offering priced at $14 a share, the top of its range. Shares of the provider online finanical services to mid-sized banks opened at 15 1/16 and rose 1 to 15 in late morning trade.

  • Network Access Solutions Inc. (Nasdaq: NASC) priced its initial stock offering at $12 a share, below its range between $14 a share and $16. Donaldson Lufkin & Jenrette led the offering. Bear Stearns, J.P. Morgan and DLJdirect (NYSE: DIR) co-managed.>