New IPO crop expected to thrive

The Net firms jockeying at the starting gate, Mpath Interactive, Razorfish, AppliedTheory, and Musicmaker.com, range from those with solid name recognition and others with leadership positions in their sector to some that remain below the radar for most investors. Marimba, a software firm, also is expected to go public this week.

"Overall what we are seeing is companies going public earlier and earlier," said Ken Fleming, a research analyst at Renaissance Capital's IPO Fund.

If anyone is to blame for the rush to go public, analysts say, the fault lies squarely with investors who have had an insatiable appetite for Internet-related IPOs since the beginning of the year.

Still, some analysts believe that most Internet IPOs are promising.

Mpath, which will trade under the symbol "MPTH," licenses a technology that allows users to create interactive sites and games using graphics, text, voice, and music over the Internet. The company plans to sell 3.9 million shares at $10 to $12 each, raising about $42.9 million.

"My guess is that Mpath will do the best in the after-market simply because of its identification with streaming media," said David Simons, managing director of Digital Video Investments. "Streaming media is all the rage."

Razorfish, which will trade under the symbol "RAZF," also is expected to gain from its name recognition. The firm offers Web site design and plans to sell 3 million shares at $10 to $12 each, raising about $33 million.

"Razorfish has a reputable name in the Internet community," said Simons. "I am not clear whether investors know what exactly it does."

Simons added that as more and more Internet firms come to market, it is becoming increasingly difficult to distinguish between them.

"They will still most likely be successful because of the established pattern which everyone knows and expects," Simons added.

AppliedTheory, which will trade under the symbol "ATHY," provides Internet access as well as hosting and design services to businesses. The company plans to bring 4.5 million shares to market at $12 to $15 each.

"[The ISP] business is tough to succeed in," said Simons. "But people are hoping to find some way to [copy] the success of EarthLink and MindSpring."

Simons thinks there simply is no way to justify the valuations of second- and third-tier ISPs such as AppliedTheory.

Musicmaker.com, which will trade under the symbol "HITS," is expected to do well simply because it has the ".com" in its name, unlike the other firms going to the market this week.

Marimba, whose ticker will be "MRBA," sells software that allows companies to distribute or update software over the Net. Analysts say the company has strong name recognition. Marimba plans to sell 4 million shares at $13 to $15 each, raising about $64 million.

"Marimba is certainly the most established in terms of longevity and in terms of demonstrated ability to survive and adapt," said Simons. "Unfortunately, a software company doesn't tend to set Internet investors' hearts afire."

Still, analysts expect this week's crop to do well.

"People are taking much bigger risks," said Fleming. "Some of these companies will turn out great, but the risk is great because they are at such an early stage and have so much to do before they get to profitability."