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USWeb IPO a mixed bag

USWeb's initial public offering is priced well below its original range, but the stock gains 31 percent during its first day of trading.

After pricing below its target, USWeb (USWB) gained 31 percent during its first day as a public company.

The company's stock ended up 2-3/8, at 10 per share, after gaining just 1/8 on its first trade of the day, up from the 7-1/2 price set by underwriters.

Although the Internet solutions company, which pioneered the concept of franchising Web operations to the Internet, ended the day well above its opening, it did not surpass its original range of 9 to 11 a share.

Richard Peterson, an IPO analyst with Securities Data, said four companies out of 29 have had to price their IPOs below their range since November 24.

"The companies that had to price below their range were off by 10 to 15 percent," he said.

Although USWeb's IPO raised $37.5 million, the figure was 31.8 percent below what the company had hoped to raise if the IPO had been able to price at its target of 11.

USWeb is hitting the market at a time when a number of recent tech IPOs have failed to generate the same investor excitement that many other tech offerings received back in August, when tech IPOs in general were on a hot run. One exception to the current trend was RealNetworks' debut on the public market.

USWeb offers intranet, extranet, and Web-site solutions for medium-sized and large businesses. The company is seeking to expand its Internet professional services through acquisitions, and has acquired more than 20 competitors and affiliates since April.

According to USWeb's latest quarterly earnings report, the company posted revenue of $5.7 million for the period ending September 30, up from $411,000 a year ago and $2.4 million in the previous quarter.

USWeb's net loss for the quarter was $18 million, which widened over its loss of $3.9 million a year ago and over the $15.4 million figure the company reported for the previous quarter.

One company that already has signed up as an investor in USWeb's newly public entity is Intel (INTC). The chip giant plans to take a $10 million stake in the company, according to a recent SEC filing.

Intel, which is also an investor in CNET: The Computer Network, has signed an agreement with USWeb to jointly develop a program that promotes end-to-end e-commerce business solutions running on Intel platforms, according to the SEC filing.