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IPO Roundup: Martha Stewart slams WWF and PC-Tel

Two IPO contenders Tuesday were no match for Martha Stewart in the ring Tuesday -- shares of Martha Stewart Living Omnimedia, Inc. (Nasdaq: MSO), up 113 percent, was beating the World Wrestling Federation (Nasdaq: WWFE) and PC Tel (Nasdaq: PCTI) to a pulp.

Martha Stewart priced 7.2 million shares at $18, the top of their upwardly revised range. Shares were originally priced between $13 and $15. Morgan Stanley & Co. is the lead underwriter and Merrill Lynch and Bear Stearns are co-managers.

What's the secret to Martha's success? Martha Stewart is a potential Internet play -- Martha Stewart's Net business had an operating loss of $5 million in 1998 and $4 million for the first six months of 1999. But Internet and direct commerce was the second largest revenue generator for Martha Stewart for the six months ending June 30. Internet/direct sales were $13.9 million for that period, equal to Internet revenue for all of 1998, according to the company's filings.

Publishing was the big revenue driver with $73.4 million followed by television ($12.8 million) and merchandising ($11.5 million). Revenue for the six months ending June 30 was $111.5 million with a profit of more than $14 million.

Internet and direct commerce (catalogs) are Martha's fastest growing category and her site has more than 925,000 registered users.

  • The World Wrestling Federation (Nasdaq: WWFE) made a solid debut Tuesday, but the IPO wasn't half as flashy as the company's usual production. Shares rose 8 1/8 to 25 1/8, or 48 percent.

    The company offered its 10 million shares at $17, above its $14-16 expected range. The WWF offers TV, pay-per-view and live events featuring such wrestling stars as Stone Cold Steve Austin and Chynna.

    The company had net earnings of $20.2 million on revenue of $76.2 million for the three months ended July 30, 1999.

    One of the few downsides to this cash-muscular company is that it is 100 percent-owned by to chairman Vince McMahon, who holds control of the company. The shares sold in the initial public offering were all non-voting. At $17, McMahon netted nearly $1 billion from the IPO.

    Bear Stearns is the lead underwriter for the offering of 10.0 million shares, and CS First Boston and Merrill Lynch are co-managers.

  • PC Tel (Nasdaq: PCTI) put on a good show, up 7 1/4 to 24 1/4, or 43 percent. The provider of software-based analog modems, priced its IPO at $17 per share, the high end of its $15-$17 range. The company offered 4.6 million shares to the public.

    PC-Tel had healthy income of $2.7 million on revenue of $33.0 million for the six months ended June 30, 1999.

    Banc of America is the lead underwriter for the deal, with Warburg Dillon Read and Needham & Co. acting as co-managers.