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TheGlobe.com sets IPO price

The community builder gets encouragement from EarthWeb and other initial public offerings and expects to hit the market tomorrow.

Despite postponing its initial public offering last month, TheGlobe.com today set an IPO target price and expects to hit the market tomorrow.

The community builder, getting encouragement from the successful IPO launch yesterday of EarthWeb and the strong post-IPO performance of online auctioneer eBay, set its price at 9 a share. That's in the middle of its revised range of 8 to 10 a share, which it had previously lowered from 11 to 13, due to weak demand.

TheGlobe.com expects to raise $27.9 million in capital, with its 3.1 million shares it plans to float out. It's anticipated debut follows EarthWeb's good first day and marks another sign of Internet IPOs staging a comeback after a miserable fall.

EarthWeb, which priced at $14 per share, saw its stock soar as high as 59 in its first day of trading before closing at 48.6875. And today, the stock soared again to close at 69.2500, up 20.5625 points.

EarthWeb, which raised $29.4 million in its 2.1 million share offering, was the first Internet IPO to hit the market since eBay's successful launch in September.

Analysts noted the significance of EarthWeb's debut. As yesterday's performance shows, an Internet company that has yet to turn a profit may be able to launch a successful public offering amid these volatile markets.

Internet public offerings have faced a tough time following eBay's debut. The profitable online auctioneer raised investors' hopes--perhaps unrealistically--that more technology IPOs would be able to follow eBay's dizzying climb.

"After eBay raised the bar for all Internet IPOs, a number of them took a hiatus," said David Menlow, president of IPO Financial Network.

Indeed, Vignette, a Web management software maker, also postponed its offerings in late October. And online health care and benefits management company Healtheon withdrew its plans around the same time.

But EarthWeb's successful launch was possible due to two events, IPO analysts note.

"There are three important words in the IPO market--timing, timing, timing," Menlow said. "[The offerings] came out as Internet stocks were undergoing a price move on some high-visibility issues. If they had come out two weeks ago, it may have had a marginal performance."

And William Smith, president of Renaissance Capital's IPO+Aftermarket Fund, said eBay's 250 percent rise in the past three weeks helped boost expectations for EarthWeb's IPO.

"A lot of Internet stocks go up on their first day and then drift around a lot after that," Smith said. "The real engine in the IPO market is their after-market trading. EBay's strong after-market helped EarthWeb come out."

He added: "EarthWeb is the first small, non-profitable company to come out and it connotes that a part of the market that wasn't there is coming back."

But analysts caution that while more Internet IPOs may plow forward with plans, don't expect a boom in public offerings between now and the end of the year. The IPO market typically slows between Thanksgiving and New Year's, Smith said.