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Cysive IPO lives up to hype

Cysive Inc. (Nasdaq: CYSV) shares rocketed up 20 3/4, or 122 percent, to 37 3/4 Friday in its initial public offering. The e-commerce software company shares moved as high as 41 3/4 in early trading.

Cysive priced at $17 a share, well above its original range of $11 to $13 a share.

The offering was underwritten by Thomas Weisel Partners, First Union Securities Inc. and Friedman Billings Ramsey, who have the option to buy 502,500 more shares in case of heavy demand. Cysive will offer 3.4 million shares on the market.

Cysive, which helps companies build Internet sites to sell their goods by designing and constructing complex, highly customized systems and architectures, competes in the "e-business engineering market." The company's main competitors Internet professional services providers, such as Proxicom, Inc. (Nasdaq: PXCM), Scient Corp. and Viant Corp. (Nasdaq: VIAN); large information technology consulting services providers, such as Andersen Consulting LLP, Electronic Data Systems Corporation (NYSE: EDS), International Business Machines Corporation (NYSE: IBM) and PricewaterhouseCoopers, LLC; and traditional information technology services providers, such as Sapient Corp. (Nasdaq: SAPE).

Scient Corp. (Nasdaq: SCNT) and Razorfish Inc. (Nasdaq: RAZF) are considered similar companies. Cysive specializes in large scale eBusinesses that route customers through front-end systems into back-end functions such as accounting, billing, manufacturing and inventory control.

Cysive had a net loss of $11.4 million on revenue of $9.4 million for the six months ended June 30 , compared to a loss of $282,000 on revenue of $9,424 for the comparable 1998 period.

Risks cited in the company's regulatory filings include a concentration of revenue sources. For the six-month period ended June 30, the company's five largest customers represented 82.5 percent of revenue. Sylvan Prometric accounted for 35.1 percent of revenue, while Classified Ventures, Inc./Cars.com, Equifax Secure, Inc, Cisco Systems, and UUNet Technologies, Inc. were Cysive's other biggest customers.