Net investors are still wild about Net stocks. At least four more Internet companies will hold initial public offerings on Thursday and Friday to tap into the enthusiasm.
The four -- iTurf, Value America, Extreme Networks, and USInternetworking -- will all do just fine, considering other recent explosive debuts, analysts said. On Wednesday, shares of Rhythms NetConnections, a high-speed Internet access company, more than tripled on the first day of trading.
Analysts said iTurf, an online retailer of teen clothing, will likely get the most attention.
"ITurf should be a hot deal," said Steven Tuen, analyst at IPO Value Monitor. "It's able to get pretty good margins on its products, while other e-commerce companies are battling it out on price."
ITurf is a network of Web sites that offer chat, email, and clothes, clothes, clothes aimed at Generation Y -- cool kids aged 10 to 24. Collectively, the young 'uns have US$278 billion bucks to spend on bell-bottom pants, tiny tank tops, and strawberry bobby pins.
In the year ended 31 January 1999, iTurf made $464,000 in net income on $4 million in revenues. ITurf is subject to the fashion industry's fickle turns. "If they misjudge, they can really hurt sales," said Tuen.
Value America is another online retailer, selling software, computer, and office equipment. It also sells jewelry, golf balls, toothpaste, and other popular discount items.
"They should do well," said Tuen, but conceded that "long term, I may have reservations. I don't know whether their strategy will pan out." Tuen said that most online retailers specialize in a certain area, while Value America is "trying to sell anything and everything."
In 1998, the company had a loss of $53.6 million on revenue of $41.5 million. It also attracted the attention of Microsoft co-founder Paul Allen, who holds a stake.
Extreme Networks' IPO, expected Friday, should also do well, said Paul Bard, analyst at Renaissance Capital's IPO Fund. It's a good sign of investor demand that the company boosted the number of shares to be offered, he said.
Extreme Networks sells switching products. "Their products are hardware-based, so they can sell them at a significant discount," said Bard. He said Extreme could build up a decent market share and even become a potential buyout candidate for a larger competitor, such as Cisco Systems.
For the six months ended 31 December 1998, Extreme Networks had losses of $4.9 million on $30.8 million in revenues.
Tuen wasn't so bullish on the company, but he admitted it would do well in its market debut. "Cisco is the 600-pound gorilla in this industry, so they have a big fight ahead of them," he said.
Also slated for Friday is an offering of 6 million shares from USInternetworking, a company offering expensive software from the likes of PeopleSoft, Siebel, Broadvision, and Sagent to smaller businesses at a lesser price than what they would have to pay to set up and support the software themselves.
"It should do OK, but it's one of the weaker deals," said Tuen. "They're a brand-new company. They have a concept, but need to prove their plan works."
USInternetworking "has some solid software agreements," said Jennifer McBrien, an analyst at Renaissance. But she added, "Most of their current revenues are from acquired businesses."
The company's pro forma net losses for the year ending December 1998 were $35.1 million on revenues of $13.9 million.
