Companies whose quiet periods have drawn to a close usually see a lot of action when underwriters start shouting "buy" as they initiate coverage of the stocks. Though HotJobs.com and Red Hat followed that pattern today, shares in several of this summer's IPOs started heading south instead.
HotJobs.com (Nasdaq: HOTJ), which began trading on August 10, came to the close of its 25-day quiet period Saturday. Shares were up 17 percent, or 5 to 35, Tuesday morning as investors followed analysts' advice to "buy." The company went public in the dead of August because it just couldn't wait any longer to tap the market.
Deutsche Banc Alex Brown, the company's lead underwriter, BancBoston Robertson Stephens, and SG Cowen, the co-managers for the IPO, all initiated coverage with "buy" ratings. Robertson Stephens also announced it sees above average revenue growth for the online recruiting site.
BancBoston Robertson Stephens managing director and senior IT analyst Steven S. Birer said that "while shares of HotJobs.com have nearly quadrupled since the company's IPO, we believe that the company's long-term outlook should provide investors with above-average returns."
Hotjobs.com recently rated the 5th most used online job site, and was ranked as having the highest brand recognition of the online job boards and the 6th highest name recognition of all eCommerce sites on the Internet."
The online recruiting market is expected to grow at a rate of about 75 percent over the next 4 years, reaching $1.7 billion in 2003, said Birer in a report. "Assuming that the company remains in the top 10 and garners 10 to 20 percent of the 80 percent market-share we believe will be captured by the top 10, HotJobs.com could post 2003 revenues in the $139 million to $278 million range," he added.
Red Hat (Nasdaq: RHAT) was also rising on chatter Tuesday. Other companies whose quiet periods have just ended over the long weekend include Interworld Corp. (Nasdaq: INTW) which was down 2 percent, or 5/8 to 29 7/8, and IXNet Inc. (Nasdaq: EXNT), down 7 percent, or 1 7/16 to 19 1/2 after Merrill Lynch called it "near-term accumulate/long-term buy."
Netscout Systems Inc. (Nasdaq: NTCT) also shed a whopping 9 percent, or 3 3/8 to 33 1/8 after Deutsche Banc Alex Brown started them with a "buy."
Mortgage.com (Nasdaq: MDCM) sunk 8 percent, or 1 3/8 to 15 7/16 after CSFB started coverage with a "buy" rating.
Homestore.com (Nasdaq: HOMS) which was also started at a "buy" by BancBoston, sank 2 5/16 to 50 7/16.
Companies whose quiet periods ended today include Active Software Inc. (Nasdaq: ASWX) and Quest Software Inc. (Nasdaq:QSFT).
Active Software was down 5/16 to 20 3/8, after Goldman Sachs put the stock on its recommended list, and Lehman Brothers started it with a "buy" rating. Quest was down 15/16 to 41 5/8, and had yet to be started by its underwriters.