Be Free (Nasdaq: BFRE) closed up 17, or 142 percent, to 29 Wednesday after prcing its 5.6-million share initial public offering at $12 each. The stock rose as high as 36 1/4 in early trading.
The pay-per-click e-marketing business is one of the more promising offerings on this week's IPO calendar. Donaldson Lufkin & Jenrette is the lead underwriter for the offering, Hambrecht & Quist and Dain Rauscher Wells are co-managers.
Be Free's revenue for the 9 months ended September 30 increased to $2.7 million, compared to $933 000 for the same period in 1998. Net loss for the 9 months was 12.4 million, much wider than the $2.9 million for the 1998 period.
The company looks good in terms of revenue growth, and "gross margins are really high -- at 85 percent for the recent quarter," said Francis Gaskins of the IPO Desktop, who considered the stock a good buy since the company has just reached critical mass.
The companies customer base is not exactly diverse though; Be Free's largest customer, barnesandnoble.com, represented 78 percent, 73 percent and 30 percent of revenue in 1997, 1998 and the first nine months of 1999, respectively. In the first nine months of 1999, GeoCities, a subsidiary of Yahoo! Inc., and Network Solutions, Inc., each accounted for in excess of 10 percent of revenue.
Be Free's services allow its e-merchant customers pay their marketing partners only for their individual promotions that succeed by tracking viewing, clicks and purchases .