Some investors have singled out Cobalt Networks as the IPO to watch next week, largely because of the demand for offerings by Linux-related companies. The company makes server appliances that run the Linux operating system.
"I think it will do well because it's in a hot area and we've seen some really strong growth in Cobalt's products," said Paul Bard, an analyst with Renaissance Capital's IPO Fund. "They're unique in that they give smaller companies an opportunity to establish themselves online with low-cost, specialized servers that can create and host a company's Web presence."
Cobalt also has a five-year joint venture agreement with Gateway to develop a similar product for the PC maker.
Cobalt's IPO will mark the second Linux company to hit the public markets since Red Hat debuted with great fanfare in August. Red Hat surged nearly fourfold above its offer price of $14 a share on its first day of trading. The shares are now trading at 88.56.
Although competitor VA Linux is waiting in the wings with its IPO, Bard said that should not dilute investor interest in Cobalt. He said the first two companies to come out with an IPO in a hot sector tend to fare well.
Cobalt plans to raise up to $80 million based on the high end of its pricing range of $14 to $16 a share and the 5 million shares it plans to offer.
The company is expected to price Thursday and begin trading Friday under the ticker "COBT." Goldman Sachs is the lead underwriter.
If history is any guide, reaching the public market on a Friday could be a factor in Cobalt's favor.
Today, Akamai surged 119.19 to close at 145.19 in its first day of trading, a gain of 458 percent. The shares were initially priced at $26. Last Friday, shares of Sycamore Networks jumped 386 percent in their first day of trading.
During a nine-month period ending October 1, Cobalt generated revenues of $13.8 million, compared with $1.5 million a year ago. The company's loss widened to $13.7 million in the period, up from a loss of $6.6 million a year earlier.
In the Net arena, Be Free is one of several IPOs scheduled for next week. The company, which arranges for e-tailers to sell products from other Web sites, is hoping to raise up to $83 million based on the high end of its $15 to $17 pricing range and the 4.9 million shares it plans to offer.
The company recently raised its pricing range and lowered the number of shares offered. Previously the company had a range of $8 to $10 a share, with 5.6 million shares to be offered. With its latest terms, Be Free will increase the amount of capital raised by 48.7 percent.
"By cutting the number of shares, this will probably create more demand and a price increase in the after-market," said Richard Peterson, an IPO analyst with Securities Data.
The company expects to price its shares Tuesday and begin trading on Wednesday under the ticker "BFRE." Donaldson Lufkin & Jenrette is the lead underwriter.
During the nine months ended September 30, Be Free generated revenues of $2.7 million, up from $941,000 a year ago. Its loss increased to $12.5 million for the nine-month period, compared with a loss of $2.9 million a year earlier.
Tickets.com is hoping to become a sellout with its IPO, which is expected to price Wednesday and begin trading Thursday under the ticker "TIXX." The company sells tickets to sporting events, concerts, and other events through retail outlets and its Web site.
Tickets.com is seeking to raise up to $60.3 million based on the high end of its pricing range of $7 to $9 a share and the 6.7 million shares it plans to float. Morgan Stanley is the lead manager for the offering.
Revenues during the six months ended June 30 reached $19.3 million, up from $13.9 million a year ago. Tickets.com's loss rose to $23.3 million, compared with a loss of $5.9 million a year ago.
But questions remain about whether it can outdo its giant competitor, Ticketmaster.
"Ticketmaster is their biggest competitor--a very big competitor," said Peony Kao, an analyst with Renaissance Capital. "Ticketmaster also has a lawsuit against this company. These two things will dampen reception to Tickets.com. If the market is strong, however, it could price within or above its range; but if it's weak, then it may price below."