Bolstered by the popularity of book sales and its brand name, online bookseller Amazon.com has increased the range of its initial public offering price, despite the market's cooling toward Internet stocks.
The company yesterday filed a target price of $12 to $14 a share with the Security and Exchange Commission. It had previously registered the offering with a $13 stock price.
Amazon.com is looking to raise between $30 million and $35 million with its IPO of 2.5 million shares of common stock. That would place the company's value between $279.6 million and $326.2 million, based on its 23.3 million shares outstanding.
Richard Peterson, an IPO analyst with Securities Data, says he expects the IPO to launch the week of May 12.
Amazon.com initially filed for its IPO on March 24. Peterson said a company usually goes public six to eight weeks from this initial filing date. "An early May target is reasonable," he said.
But the volatile nature of the stock market, and technology holdings in particular, may take its toll on the desired launch price.
There have been 40 technology IPOs this year, of which only seven have come to market near the high end of the targeted price range, Peterson said.
He added that deals have been few and far between, compared with last year's presummer session, when the buoyant market created a craze for anything related to the Internet. During the first four months of this year, high-tech IPOs have raised under $1.2 billion--less than half of the $2.5 billion generated by technology offerings in the same amount of time in 1996.
And for initial offerings as a whole, one of six has been related to technology, down from the one of three last year, he said.
"There is probably an expectation [surrounding Amazon.com's IPO]. Booksellers are doing quite well, and Amazon.com just might be able to piggyback on that popularity," Peterson said.
The company has applied to have the common stock approved for listing on the Nasdaq market under the ticker "AMZN."
Deutsche Morgan Grenfell, the lead underwriter, will also have the option to purchase 375,000 share.