Nearly two dozen IPOs on tap despite jittery market
The companies, including AvantGo, are set to launch initial public offerings this week, a prospect that some analysts say seems overly optimistic given the recent turmoil in the stock market.
The Nasdaq composite index and many tech stocks slumped Friday after chip giant Intel warned Thursday that third-quarter revenue will fall short of expectations because of weaker demand in Europe.
"What you have is a technology bellwether missing their numbers, and I think that's going to cause a bunch of investors to be especially wary. And that will impact the IPO market," said Steven Tuen, a portfolio manager with the Kinetics Internet Fund.
But sour market conditions don't always keep a strong IPO down. Friday, for example, shares of InRange Technologies soared 170 percent in first-day trading. Shares of the company, which makes switches for the storage networking market, opened at $36, more than double their $16 offering price. The stock closed at $43.75.
"Investors just put on their blinders and snapped up this company, somewhat oblivious to what's going on in the broader market," said Randall Roth, an analyst with the IPO Plus Aftermarket Fund.
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Although AvantGo is clearly a leader in its market, Roth said, the entire industry of wireless communications through handheld devices is still in its infancy. He predicts that AvantGo's stock will do well but does not expect a moon shot.
"We're still struggling to have a fully integrated second-generation mobile telecom infrastructure in this country," Roth said.
AvantGo hopes to raise $55 million through the sale of 5.5 million shares at a range of $9 to $11. The company has applied to trade on the Nasdaq under the ticker symbol "AVGO." Credit Suisse First Boston will handle the sale.
CoSine Communications is another IPO scheduled for this week that many investors will be watching. Based in Redwood City, Calif., CoSine makes switches and software that network service providers can use to deliver Internet-based services.
CoSine hopes to raise $220 million through the sale of 10 million shares at
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"They revised the price range up from $13 to $15, to $15 to $17. That's always a really good sign in the short term," said Matt Zito, author of "Trade IPOs Online" and president of IPOguys.com.
The following is a partial list of other technology companies scheduled to debut this week:
• Docent makes software that lets companies and universities administer online training courses. The Mountain View, Calif.-based company plans to raise $88 million through the sale of 8 million shares at a range of $9 to $11.
Docent has applied to trade on the Nasdaq under the ticker symbol "DCNT." Deutsche Banc Alex Brown is the lead underwriter of the sale.
• Elastic Networks makes digital subscriber line (DSL) products used to deliver high-speed Internet access over phone lines. Nortel Networks owns 63 percent of the company, whose customers include Nortel, Darwin Networks, BellSouth, Sprint and Spain-based Terra Networks.
Elastic Networks plans to raise $85.8 million through the sale of 7.8 million shares at $10 to $12. The company has applied to trade on the Nasdaq under the ticker symbol "ELAS." Chase Hambrecht & Quist is the lead underwriter of the sale.
• WebSide Story provides real-time Web site traffic analysis. The San Diego-based company hopes to raise $45 million through the sale of 3 million shares at a range of $13 to $15.
The company has applied to trade on the Nasdaq under the ticker symbol "WSSI." Lehman Brothers is the lead underwriter of the sale.
• Simple Technologies makes memory products including dynamic random-access memory (DRAM), static random-access memory (SRAM) and flash memory. The Santa Ana, Calif.-based company plans to raise $70.4 million through the sale of 6.4 million shares at a range of $10 to $12.
Simple Technologies has applied to trade on the Nasdaq under the ticker symbol "STEC." Lehman Brothers is the lead underwriter of the sale.