51.5 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

IPO WOES

On both the dizzying ride up and the stomach-turning trip down, technology stocks continue to be the standard bearers for Orange County companies going public.

Of the 18 OC companies that undertook initial public offerings or were spun off in the past 17 months, 11 are tech firms. Some have seen their shares post big gains, even with the current market turmoil. But more than half of the newly public companies saw their shares sink like rocks in a pond.

That’s according to this week’s list, which tracks OC IPOs from 1999 to present. The companies are ranked by the amount of money generated by offering shares to the public. The list includes only stocks listed on the New York and Nasdaq exchanges. See related story on page 30.

The two biggest generators were spin-offs. Newport Beach chip maker Conexant Systems Inc. on its opening day generated $1.7 billion for its shareholders who had held stock in parent Rockwell International Corp. Edwards Lifesciences Corp. of Irvine generated $812 million for its shareholders, who were owners of stock in parent Baxter International Inc.

As for pure IPO plays, four companies raised more than $100 million each: Buy.com Inc. of Aliso Viejo, $182 million; eMachines Inc. of Irvine, $180 million; DDI Corp. of Anaheim, $168 million; and Acme Communications Inc. of Santa Ana, $115 million.

The smallest IPO was Newport Beach-based Beta Oil & Gas Inc., which raised $8.8 million.

But as for stock performance, that’s another story. The broader market divergence between blue-chip tech stocks and dot-coms clearly is playing out in OC.

Four of the top five IPOs, ranked by percentage change from their IPO date to the close of May 22, were tech stocks. At the same time, six of the 10 firms with prices that declined from their IPO dates also were tech companies, many of them Internet businesses.

Big names such as Conexant and Irvine software maker Quest Software Inc. have held their own. Quest Software’s shares were up 471% since its August IPO. Conexant’s shares were up 322% since its Jan. 1999 spin-off.

But dot-coms fared the worst. Tickets.com Inc. of Costa Mesa and Autobytel.com Inc. of Irvine have seen their shares plummet, 72.5% and 72% respectively, as investors questioned their business models.

Other poor tech performers include: Buy.com, down 48.5%; Continuus Software Corp. of Irvine, down 54.6%; and eMachines Inc. of Irvine, down 29.6%.

While tech issues dominated the list, other OC IPOs run the gamut. They include companies in post-secondary education, oil and gas, insurance and real estate, engineering, TV and a service provider for collectors.

Already, the pace of IPOs has slowed this year. So far, only four OC companies have gone public in 2000. Last year, 14 companies went public. There were six in 1998, 14 in 1997 and 26 in 1996.

The 18 companies on this list averaged an unweighted return of 24.7%; however, if Quest Software and Conexant were taken out, the average return would be a minus 21.7%.

Compared to the major stock indices, the local IPOs lagged the tech-dominated Nasdaq, which, despite being down for the year, is up 52% from Jan. 1, 1999 to May 22.

But OC IPOs have fared better than the S & P; 500, which is up 14% during the same period, the Dow Jones Industrial Average, which is up 15%, and the Russell 2000, up 12%. (Note that comparisons are not exact as the index changes are calculated over a full period while some of the IPOs have been public for less than a year).

Perhaps no roller-coaster ride has been as spectacular as TriZetto Group Inc.’s. The Newport Beach company is a healthcare applications services provider and Internet portal. After going public at 9 in October, its share price started off slowly but then zoomed as high as 91 on March 1.

Since then, the stock has sunk after TriZetto in March said it planned to merge with IMS Health Inc. of Westport, Conn. Investors balked at the deal, sending the company’s shares on an elevator ride down. On May 17, TriZetto backpedaled and said it plans to only buy a unit of IMS for $255 million. After all was said and done, the company’s shares are up 32.7% from their IPO debut.

A couple of non-high tech stocks also did well.

Beta Oil & Gas opened at 6 last July. Its current price of 9 gave it a 50% return.

Corinthian Colleges Inc. of Santa Ana went out at 18 in February 1999 and is currently at nearly 22, giving it a 20% return.

The poor performers weren’t limited to the Internet. Collectors Universe Inc. of Santa Ana was down 50%, while TV stations owner Acme Communications Inc. was down 48.7%.

Three companies filed for IPOs last year but decided to cancel their public offerings amid a weak market for new issues: Ansys Diagnostics Inc. of Lake Forest; Pacific Community Banking Group of Laguna Hills and VillageFax.com of Tustin. n


OC’s Not-So-Public IPOs

A handful of other OC companies also took the public plunge in the past 17 months.

But these companies did so a lot more modestly than high-profile IPOs such as Quest Software Inc., opting instead for listings on the low-profile over-the-counter exchange.

Here they are:

n AccessPoint Corp. of Irvine provides merchants with databases to enact secure e-commerce transactions. It held a reverse IPO merger with JSJ Capital III Inc. Its shares trade at about 3, a 52-week low.

n California Software Corp. of Irvine makes networking software for businesses. It went public in November and has seen its shares go as low as a few cents to as high as 18. It even had a stock split in March and is currently at 6.

n Internet Golf Association Inc. of Dana Point organizes and conducts interactive golf tournaments on the Internet. Through its web site, www.IGALinks.com, players can join the Internet Golf Association.

n Internet Infinity Inc. of Costa Mesa

has a businesse-commercesite, www.MLMHUB.com, for what it calls “the direct selling community.” It began trading last December and its 52-week range has been from 12 to 56 cents. Last week it was 37 cents.

n MindArrow Systems Inc. of Aliso Viejo was formerly known as eCommercial.com Inc. It describes itself as a global provider of interactive marketing automation systems and services, utilizing the Internet to enable businesses to increase revenue by improving relationship management. Its 52-week range has been between 6 and 55. Last week, it was at 8 3/4.

n PriceNet USA.com of Irvine touts itself as a high-tech marketing company. It reportedly began trading in May of last year, although it doesn’t have federal filings online. Its Web site said its CEO is Don Rackemann, a former owner of racetracks, and said he once set speed records on the Bonneville Salt Flats. The company’s site brashly goes on to add Rackemann has “managed to construct a business plan that would make Jesse James turn legit.”

,Peter Brennan

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-