IPO Update: Vicinity takes off in debut

Jan. 2, 2002 4:43 p.m. PT

2 min read

Vicinity Corp. (Nasdaq: VCNT) closed up 31 3/4, or 187 percent, to 48 3/4 Wednesday after it priced shares at $17 a piece.

Its price range was repeatedly raised ahead of the IPO, illustrating the strong demand for the provider of Internet-based marketing infrastructure services.

The Palo Alto, Calif.-based company raised the number of shares in its IPO to 7 million from 6 million on Monday. Vicinity originally planned to offer 5 million shares at $10 to $12, and last month upped the number of shares to 6 million and raised the range to $11 to $13.

They will be one of the hottest stocks of the month, according to David Menlow of the IPO financial network, "because of their ability to transfer Internet traffic into store traffic" based on a unique inventory-tracking model that directs consumers to the nearest location of their desired item. It also provides the information over land-line, wireless telephone and other devices.

For the three months ended October 31, Vicinity had $2.1 million in revenue, compared to $1.2 million in 1998's comparable quarter. Net loss was $2.8 million, much wider than the $669,000 it lost in 1998's comparable quarter.

CMGI's (Nasdaq: CMGI) venture backing of the company will also give it a head start, Menlow added.

Vicinity's services direct Internet users to traditional brick and mortar outlets of more than 250 clients including industry leaders Ford Motor Co. (NYSE: F), Home Depot Inc. (NYSE: HD) and McDonald's Corp. (NYSE: MCD). Its programs work especially well for companies that have had a difficult time translating store sales into e-commerce sales.

The underwriting team is led by J.P. Morgan Co, with Bear Stearns and USB Piper Jaffray acting as co-managers.

Vicinity faces competition from companies including InfoNow Corp., which provides outsourced Web-based inquiry management services, and Where 2 Get It Inc., which provides Internet-based dealer locator service. Vicinity's SiteMaker service competes indirectly with companies that provide free or low-cost web creation and hosting services in conjunction with internet service provider, or ISP, services. And its MailMaker service competes directly with other Internet marketing companies, including Post Communications, Digital Impact (Nasdaq: DIGI), and yesmail.com (Nasdaq: YESM), which all provide outsourced electronic mail marketing services.