IPO Roundup: Mobile Telesystems leads trio in market debut

3 min read

Three overseas offerings made their debuts Friday: Mobile TeleSystems, Netease.com and Precise Software.

Russian wireless company Mobile TeleSystems (NYSE: MBT) rose 7/8 to 22 3/8, after pricing its American Depositary Shares at $21.50 each, against an announced range of $19-25, the company said on Friday.

The offering is one of the first major ones by a Russian company since the 1998 collapse of the rouble, and is seen as a bellwether for investors interest in Russia.

"Russian deals are like those from China," said Kenan Pollack of IPO Central "they have a huge potential for upside, but political concerns may cause some trepidation among American investors. " Nevertheless, Pollack cited this as a stock to watch this week

Mobile TeleSystems (MTS) holds licenses covering 34 of the country's 89 regions. MTS, which exclusively uses the GSM (global system for mobile communications) standard, has expanded its reach across Russia through acquisitions, including six mobile operators since 1998. The company is 44 percent owned by Deutsche Telekom and 42 percent owned by Russian financial-industrial conglomerate Sistema.

The company's financials are strong -- for 1999, it had net income of $85.7 million on sales of $358.3 million.

MTS said in a statement it had issued 15 million ADSs accounting for 15.4 percent of the company. It also said it had allowed underwriters to increase the issue by 15 percent.

MTS is one of the two dominant mobile phone companies in Russia, and the offering price suggests a larger capitalisation than its main competitor, Vimpelcom (NYSE:VIP).

  • Chinese Internet portal group Netease.com (Nasdaq: NTES) tumbled 2 7/8 to 12 1/8 after pricing 4.5 million American Depositary Receipts (ADRs) at $15.50 each.

    Netease.com offers Chinese language-based content and e-commerce services for Internet users in mainland China.

    The ADRs priced at the middle of their expected $14 to $17 range. Each ADR represents 100 ordinary shares. The company's listing was originally scheduled for May, but was delayed due to regulatory wrangling in Beijing, investors said last month.

    The company's losses are almost 6 times its revenue -- in 1999, the company lost $6.3 million on sales of just $1.9 million .

    Chairman William Lei Ding will own almost 60 percent of the company after the offering.

    The company's top competitors include chinadotcom (Nasdaq: CHINA) SINA.com (Nasdaq: SINA) and Sohu.com (Proposed ticker: SOHU)

  • Israeli-based Precise Software Solutions Ltd. (Nasdaq: PRSE), an provider of software that boosts the performance of Web sites, shot up 8 to 24 after it priced 4.25 million shares at $16, the top of their range, for trading Friday.

    The company said that it makes software that helps support companies' technology infrastructure. Its clients include Amazon.com (Nasdaq: AMZN), Boeing, Carnival Cruise Lines, Ford Motor and Staples.

    The company's Precise/SQL software competes with products sold by Oracle (Nasdaq: ORCL). The company said that Precise/SQL accounted for 85 percent of its software license revenues in 1999, and 86 percent in the first three months ending March 31, 2000.

    The deal's lead underwriter is Merrill Lynch.

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