@Home prices IPO at $10.50

@Home Network, sensing hot demand for its initial public offering, late today set its IPO price at $10.50 a share and bumped up the number of shares offered by 1 million, according to sources.

Earlier in the day, the company had raised its pricing range to $9 to $11 a share, up from its original range of $7 to $9 a share.

@Home, which provides Internet access by high-speed cable lines and modems, will float 9 million shares tomorrow morning, a substantial increase from its earlier plans of 8 million, said a source familiar with the deal.

That means @Home will raise $94.5 million in capital and carry a market value of $1.1 billion based on 108,520,996 shares outstanding.

Potential institutional investors who have seen the company's IPO "road show" presentations said @Home's plans could bring back the "conceptual" IPO--companies which go public with a good idea but no profits.

"I thought [the deal] was very conceptual," said one potential investor. "Very few of their points or slides were supported by their operating data over the last 12 months."

The growth rate of @Home will be largely determined by the speed that cable companies provide their Internet access. The investor, who requested anonymity, said @Home's potential will become more evident in the next six to nine months as cable companies expand the market for @Home and customers are given an opportunity to sign up for its service.

An @Home spokesman would not comment, saying that the company is in the "quiet period" mandated by the Securities and Exchange Commission.

If its IPO is successful, @Home would have huge market value for a two-year-old, money-losing company, according to many analysts. The proposed stock offering has come to symbolize the hype and promise of high-speed Net access. @Home's owners include cable TV giants Tele-Communications Incorporated, Comcast, and Cox Communications.

The company reported revenues of $1.8 million for the six months ending June 30. It posted a loss of $22.8 million for the period, up from $8.3 million a year ago.

The pitch to @Home to investors is going well, people familiar with the IPO said. "It looks like a hot deal," Walter Price, principal of RCM Capital Management and an institutional investor, said in an earlier interview. "I've heard 10 million shares on the West Coast alone have been subscribed."

Price speculated the deal would become "hot money," meaning that investors expect share prices to rise sharply on the first day of trading. He said that "people are expecting to see the stock rise 30 percent to 40 percent on its first day." This implies that early buyers could turn a profit by selling the shares when the price peaks.

Others, such as the cable TV operators, are in the company for the long haul. The underwriters are looking to place the shares with long-term investors, according to Price.

Underwriters in the deal include Morgan Stanley, Merrill Lynch, Alex. Brown, and Hambrecht & Quist.

@Home's filing comes amid a recent spurt of successful high-tech public offerings by Amazon.com, Rambus, and Great Plains Software. High-tech IPOs also are planned by Network Solutions, Concentric Network, and CMP Media.

One beneficiary of the renewed IPO fever has been high-tech venture capitalist Kleiner Perkins Caufield & Byers. The company helped finance @Home, Amazon.com, and Concentric.