For some start-ups, not a rosy quarter
By Ronald Rosenberg, Globe Staff, August 15, 1999
A recent cooling of Wall Street's love affair with new technology and
Internet firms has affected some of the 11 companies that launched initial
public offerings in the second quarter. So far, only five have shown
significant gains.
Some new issues that played up their World Wide Web connections did well,
particularly those that lived up to expectations by posting solid sales gains.
They generally saw their share prices double.
However, investors showed little enthusiasm for new companies that were
not Internet-related, such as Implant Sciences Corp. of Wakefield, whose
combination of warrants and common stock has hardly moved since it went public
in June.
Even Quincy-based Network Plus Corp., a large regional player in
long-distance telephone and telecommunications services in the Northeast, has
seen few changes in its stock price. The 9-year-old company raised $128
million before underwriting fees -- the single largest IPO in the second
quarter.
Less fortunate were investors of Nextera Enterprises of Lexington, a
business strategy and information technology consulting firm whose shares,
which went out at $10 apiece, began slipping shortly after its May IPO and are
now priced at $5 each. The company, whose backers include junk bond financier
Michael Milken and Oracle Corp. chairman Lawrence Ellison, face stiff
competition from such rivals as Charles River Associates, several analysts
said.
Wall Street also seemed to take a dim view of companies that suddenly
added ``.com'' just before their IPOs. Streamline.com was originally
Streamline, a pioneer in the on-line grocery shopping and delivery services
for upscale suburban families, and had significant financial backing from
Reliance Insurance Co. of New York and Nordstrom Inc., the Seattle-based
department store chain.
Since it went public at $10 a share, raising $45 million,
Streamline.com's stock has slipped, closing Friday to 8 7/32, even though the
company's revenues have doubled in the second quarter.
But shareholders in three New England technology and Internet-related
companies that went public in the second quarter did catch the wave. Silknet
Software Inc., of Manchester, N.H., which raised $45 million in May selling
shares at $15 apiece, reported a threefold increase in its fourth-quarter
revenues and added customers, including Priceline.com. It now trades at more
than $31 a share.
Boston-based Viant Corp., which helps major companies expand into
electronic commerce, saw its stock soar June 18, its first day of trading,
climbing more than $8 a share. Since its $16 per share IPO, the stock has
doubled, as the company has reported strong operating results and new
contracts with Sears Roebuck and Co. and Wit Capital.
And the biggest gainer: Maker Communications Inc. of Framingham, whose
semiconductor design software helps engineers develop communications
processors. Its shares closed Friday at 28 7/8, more than double its $13
initial offering price in May.
