IPO Update: Netro soars; Headhunter.net falls flat
Netro Corp. (Nasdaq: NTRO), a wireless data access systems provider, rocketed up 15 1/2, or 194 percent, to 23 1/2 in its initial public offering.
The stock debuted at $8 a share, the middle of its proposed $7-$9 range.
The company's net loss for the 6 months ended June 30, was $14.2 million on revenue of $5.3 million, compared to a loss of $13.7 million on revenue of $3.3 million for the same period of 1998.
Risks included in the company's regulatory filings include the difficulty of predicting future revenue since the company's limited revenues to date have come mostly from sales of AirMAN, a discontinued product.
The company also cites its dependence on limited sole source vendors for key components. For example, Netro buys key its base station shelf from Cisco Systems, Inc. under an agreement that terminates in February 2000. Cisco has recently acquired interests in companies with high-speed wireless technology, and may not continue to supply Netro after the termination of the current agreement. The company also buys most of its electronic boards from Solectron.
Netro's AirStar system allows service providers to offer integrated voice and high-speed packet data services to their business subscribers. The company began shipping the beta AirStar system to service providers in the third quarter of 1998. Most of these service providers are served through our strategic relationships with Lucent and Siemens/Italtel.
Headhunter.net, whose Web site had 100,000 users per business day in June, allows companies to list job opportunities and review resumes posted on the site.
The IPO will be managed First Union Capital Markets Corp., J.C. Bradford & Co., Wachovia Securities, Inc., and DLJdirect Inc. which have been given 450,000 extra shares in case of excess demand for the stock. That shouldn't be a problem.
Risks cited in the company's regulatory filings include the expected warning of continuing losses. Headhunter.net had a net loss of $6.5 million on revenue of $2.4 million for the 6 months ended June 30, compared to a loss of $1 million on revenue of $278,051 in the same period of 1998. As of June 30, the company had racked up about $11 million in debt.
Since just this June 1, the company has changed its pricing structure. Users must now must pay a fee for each job opportunity they post on the site. As a result of this pricing change, the number of job opportunities posted has decreased by approximately 48 percent. "Job seekers may find that our web site is not as useful as other online recruiting sites," since the pricing change, the company warns. "Decreases may reduce our revenue."
Headhunter.net also fears potential users may confuse them with other similar domain names such as headhunters.com, headhunter.org or headhunters.org, causing them to lose business to competitors.
Competitors include Monster.com, CareerBuilder.com, Career Path, Career Mosaic, and HotJobs.com, which fizzled on its recent initial offering.
The company plans to use the proceeds of the sale to expand its sales, advertising, marketing, "develop strategic relations,'' and pursue acquisitions, it said in regulatory filings.