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IPO Update: Women.com, QuickLogic impress in debuts

Women.com (Nasdaq: WOMN) and QuickLogic (Nasdaq: QUIK) shares closed up 85 percent and 51 percent, respectively,in their initial public offerings Friday despite the precipitous decline of most technology stocks.

Women.com, an online community tailored for women, ended up 8 1/2, or 85 percent, to 18 1/2 after pricing its shares at $10 each, the top of its lowered $8 to $10 range, for trading Friday.

The online women's community lowered its terms after a series of delays, and announced this week it would sell 3.75 million shares in a range of $8 - $10. The company had originally filed in May of this year with a range of $10 - $12, but postponed its deal in August. It then postponed the offering in August due to poor market conditions.

"It is unusual that Morgan Stanley has a deal of any kind that's reduced in price," said David Menlow of the IPO financial network. Menlow said that deals that have come down in price are a "scary situation for IPO players," especially ones that have been stuck in the pipeline for a while.

Other than the market's prejudice, Menlow says Women.com looks good. The IPO is like "giving Women.com a blank check for $30 million -- that's is a lot of muscle to exercise," he said in regards to its tough competition with iVillage and the yet to go public Oxygen Media.

But "it's not like iVillage is going to sit back and say 'here's another competitor knocking on our door,'" Menlow added. In fact, competitor iVillage Inc. (Nasdaq: IVIL) will actually be doing the round to investors doorsteps; the company announced this Monday it has filed for a secondary offering of 3 million common shares.

iVillage shares closed at 32 3/8 Thursday, giving it a market cap around $808 million, according to Menlow, who said Women.com "should see a market cap of about $381 million with shares of at around $9 each."

Officials from iVillage and Women.com were both unavailable for comment in accordance with quiet period restricitions.

Women.com has a net loss of $33.4 million on revenue of $9.6 million for the 6 months ended June 30. Because of the company's combination with HomeArts and Astronet, results for previous periods were unavailable. As of June 30, 1999, Women.com had an accumulated deficit of $56.6 million.

After this offering Hearst, which Women.com says it relies on for content and cross-promotion, will own about 48.4 percent of Women.com's outstanding common stock, giving trading limited access. The stock's limited float may make share prices turbulent, the filings warned.

The site receives 4.2 million unique visitors per month and 117 million page views. But Women.com also said it relies on its Astronet site to generate a big chunk of page views. In August 1999, Astronet generated about 48 percent of Women.com's page views. Astronet in turn relies on America Online, which generated 69 percent of Astronet's traffic during the same period.

QuickLogic (Nasdaq: QUIK) closed up 5 1/8, or 51 percent, to 15 1/8 in its debut.

It priced its IPO at $10, the top of the original $8-10 range for trading Friday.

Robertson Stephens is the lead underwriter for the offering of 6.7 million shares. Bear Stearns and SoundView Financial are the co-managers.

"Because it does program gate arrays it could see a mixed bag of results because of dropping semiconductor prices," said Menlow. "There is a perception that if one set of chips is dropping, they're all dropping," Menlow explained. But he still puts a premium of 15 to 20 percent on the stock.

The maker of programmable logic devices actually had net income of $987 000 on revenue of $18.4 million compared to net loss of $189 000 on revenue of $14.0 million for the 1998 period. our. Its accumulated deficit from the company's 1988 was $60.2 million.

The company warned in its regulatory filings that it has only recently started selling the embedded standard products, or ESPs, which in the first six months of 1999 accounted for approximately 4.7 percent of revenue. The company anticipates that ESPs will become an increasingly larger component of its business.

Quicklogic's current direct competitors include suppliers of complex programmable logic devices and field programmable gate arrays, such as Xilinx, Altera, Actel, Lattice Semiconductor and Lucent. Xilinx and Altera together have a majority share of the programmable logic market.

  • eBusiness software firm Jacada (Nasdaq: JCDA) wasn't as fortunate, gaining only 1/16 to 11 1/16 in its initial public offering.

    Jacada priced its IPO at $11, the middle of its $10-12 range.

    Lehman Brothers is the lead underwriter for the offering of 4.5 million shares. CIBC World Markets and SG Cowen are co-managers. The Israel-based company specializes in eBusiness enabling software for legacy software systems.

  • EPCOS AG (NYSE: EPC), the Siemens spinoff of its passive electronic component manufacturing business had yet to begin trading Friday. The company priced 48.6mm shares at $33.38 per share giving it a market value of almost $2.2 billion.

    Merrill Lynch is the lead underwriter for the deal, with Warburg Dillon Read and Commerzbank Capital acting as co-managers.