A pair of Internet initial public offerings made decent gains in their first trading day. Netcentives Inc. (Nasdaq: NCNT) moved up 1 7/16, or 12 percent, to 13 7/16 while iGo Corp. (Nasdaq: IGOC) picked up 2 9/16, or 21 percent, to 14 9/16.
Online rewards firm Netcentives priced its IPO at $12 Thursday, the top of the original $10-12 range.
CS First Boston is the lead underwriter for the offering of its 6 million shares, with Hambrecht & Quist and Thomas Weisel acting as co-managers.
"I believe the IPO market is getting a little nervous due to the market blow off on Tuesday," said David Menlow of the IPO Financial Network, who observed the quality of the deals in this week's pipeline doesn't look as robust as last week's. "The IPOs in the system seem to be in good shape, but don't have the tremendous sizzle of last week's," he said.
Netcentives (Nasdaq: NCNT), a web promotions to reward repeat customers, compares to other online promotion offerings MyPoints.com (Nasdaq: MYPT) , which went public in August, and Cybergold (Nasdaq: CGLD), which made its debut in September. MyPoints is at 14 3/16, just above its $8 debut, while Cybergold is back down to its offering price of $9 a share.
"At one point this was a better deal than it is now. I'm not sure that customer loyalty and rewards are the hot topic," said Menlow, who said he sees investor patience waning in this area.
Other competition for the company's ClickRewards Network includes loyalty programs operated by and/or for portals and other large e- commerce sites, such as AOL Rewards; Custom Loyalty Networks that Netcentives operates on behalf of third parties; and stand-alone loyalty programs and promotional tools developed by and/or for e-commerce sites, such as Autobytel.com, Mobalist Rewards, CDnow Fast Forward Rewards, and CBS SportsLine Rewards.
The company is playing a balancing act by licensing its patent to competitors for revenue; it has licensed to MyPoints.com, and may decide to license its patent to other competitors, according to the company filings. "The royalties (Netcentives) receives from these licenses, if any, may not be sufficient to offset the competitive damage caused by the competitors we enable," according to the company's filings.
The company reported a net loss of $16.1 million on revenue of $3.0 million for the six months ended June 30, compared to a loss of $5.1 million on revenue of $127 000. As of June 30, 1999, Netcentives had an accumulated deficit of $34.7 million.
Netcentives has incurred $3.5 million in advertising expenses for the six months ended June 30, 1999 in an attempt to boost brand recognition.
Online mobile electronics retailer iGo Corporation (Nasdaq: IGOC) priced its IPO at $12, above the original $9-11 range.
The company, which provides hard-to-find accessories for electronic devices like cell phones and laptop computers, will offer 5 million shares to net an estimated $45.3 million. The company plans to use proceeds of the offering for marketing and promotion and general corporate purposes, including working capital and capital expenditures.
Underwriters for the deal are BancBoston Robertson Stephens, Hambrecht & Quist and Thomas Weisel Partners.
Nearly 50 percent of Fortune 500 companies have bought its products or services, and it has strategic relationships with companies like Motorola Inc. (NYSE: MOT) and NEC Corp, the company said in its prospectus.
iGO had a net loss of $4.1 million on revenue of $7.7 million for the six months ended June 30, as compared to a net loss of $981 million on revenue of $5.7 million in the 1998 period.