Theglobe.com, taking advantage of a sudden lust among investors for Internet stocks, will try to raise US$27.9 million on Friday through an initial public offering.
Theglobe.com, which hosts Web sites for individuals, said late Thursday it priced 3.1 million shares at US$9 each. The shares could start trading as early as Friday. Bear, Stearns & Co. will be the lead underwriter.
Theglobe.com tried to go public last month, but became a victim of a big slide in technology stocks and an uncertain outlook for financial markets. In its attempt to go public, theglobe.com, first lowered the price of its shares from $11 to $13 a share, to $8 to $10 a share, and finally delayed its IPO plans, citing "the current volatility of the market."
But a week-long rally in Internet stocks and a hugely successful IPO by EarthWeb -- another Internet company whose shares tripled on the first day of trading on Wednesday -- inspired theglobe.com to squeeze in its own IPO while the market is hot, analysts said.
"Bring 'em [public] while you can," said Vince Slavin, institutional sales trader at Cantor Fitzgerald.
Analysts said Theglobe.com could ride on the coattails of EarthWeb's success -- at least for a while. But theglobe.com could struggle in the long run against top-tier rival GeoCities.
"For Internet stocks, I would be more comfortable holding the market leaders," said Steven Tuen, analyst at IPO Value Monitor. GeoCities (GCTY), theglobe.com's main rival, is clearly the market leader in the Web community, Tuen said.
Theglobe.com could still build itself up to be in GeoCities' league, but "it's difficult because GeoCities has the brand name and has been able to attract more users. Typically when users pick a community they tend to stick with it."
In the first six months of 1998, theglobe.com had revenues of $1.2 million and a loss of nearly $5.82 million. Community sites like Theglobe.com and competitor GeoCities rely on advertising for revenues.
