NaviSite Inc. (Nasdaq: NAVI) flew up 147 percent Friday, after the CMGI Inc. wholly owned subsidiary priced 5.5 million shares at $14 each. MCK Communications (Nasdaq: MCKC) also made its public trading debut, albeit with a much smaller splash.
Known to observers as "CMGI's IT department", NaviSite gained 20 5/8 to 34 5/8 after pricing at the top end of its upwardly revised price range. Perhaps the gain shouldn't come as a surprise considering CMGI's track record : subsidiary Engage Technologies, which priced its IPO at $15 in July, now trades at about $31. SilkNet (Nasdaq: SILK), a venture capital investment for CMGI, priced at $15 and recently traded at $86.
Robertson Stephens was the lead underwriter for NaviSite, with Hambrecht & Quist and FAC/Equities acting as co-managers.
NaviSite said the company is trying to shed its image as CMGI's IT department and stake its claim as an independent entity. According to the latest regulatory filings, CMGI and CMGI affiliates accounted for 62 percent of NaviSite's sales for the quarter ending July 31.
So far that hasn't resulted in profits. For the year ending July 31, sales were $10.5 million with a loss of $24.5 million. Sales more than doubled from $4 million in 1998. The company sees losses for "at least the next three years."
MCK had a net loss of $1.2 million on $4.5 million in revenue for the three months ended June 30, versus a net loss of $14 000 on revenue of $3.1 million for the same period in 1998.
Robertson Stephens is the lead underwriter; Dain Rauscher and Hambrecht & Quist are co-managers.
The company said it relies on a limited number of customers for its products which interoperate with corporate telephone systems. Its biggest customer, Lucent, accounted for 46.7 percent of MCK's revenue for the year ended April 30, 1999