Hoover's Online Year 2000 IPO Analysis Shows One Of Worst IPO Years In Recent Memory
FOR IMMEDIATE RELEASE
Hoover's IPO Scorecard Now Available On Hoover's IPO Central
AUSTIN, Texas - January 2, 2001 - In its year-end analysis of the IPO market for the year 2000, Hoover's Online (www.hoovers.com), the businessperson's portal operated by Hoover's, Inc. (Nasdaq: HOOV), has found that age-old maxim to be true - what goes up, must come down. The Hoover's Online IPO Scorecard (www.hoovers.com/ipo/scorecard) shows that from January 1, 2000, to the present, the IPO market has been on a steady decline - in the number of offerings, the volume of first-day gains and overall returns. This latest IPO Scorecard, produced by Hoover's Online editors, is part of a regular series of quarterly wrap-ups of IPO activity released on Hoover's IPO Central.
To compare, in Q4 1999, the biggest first-day IPO gain was 698% [VA Linux Systems (Nasdaq: LNUX)] and the best return was 1,160% [Akamai Technologies (Nasdaq: AKAM)]. One year later, the largest first-day Q4 gain goes to Transmeta Corporation (Nasdaq: TMTA) at 115%, and the best-returning IPO is Specialty Laboratories, Inc. (NYSE: SP) at 111%.
2000 Year-End Analysis
High-flying technology offerings kicked off the year 2000, only to ring in a dot-com shakeout in Q2 and Q3. Thus, the overall investment sentiment for the 2000 IPO market could be summed up as cool, cautious and selective - as investors learned to discern companies with proven management teams, business models and paths to profitability from those that were simply spouting e-smoke. Highlights of 2000, as reported throughout the year by Hoover's Online, include:
Q1 2000: webMethods (Nasdaq: WEBM) had the best first-day gain for the quarter (508%), as well as the best return (590%). The average overall first-day pop was 93%. Four CEOs each walked away with more than $0.5 billion in "paper" IPO gains.
Q2 2000: Marvell Technology Group Ltd. (Nasdaq: MRVL) had the best first-day pop at 278%, while the average overall first-day gain was down to 35%. After the Nasdaq correction in mid-April, some 40% of IPO companies in the high-tech sector were trading below their original offering price. AT&T Wireless (NYSE: AWE) went public with a $10.6 billion offering, the largest IPO in US history.
Q3 2000: First-day gains continued to decline, as Avici Systems, Inc. (Nasdaq: AVCI) had the best first-day pop of 212%. Only two IPO companies that priced in Q3 had a dot-com in their names, as opposed to 19 in the same quarter one year earlier. The biotech arena saw an IPO boost with 33 pricings for the quarter.
Q4 2000: IPO withdrawals began to outpace the number of new filings, while many companies postponed their IPOs altogether or cut asking prices because of rocky market conditions. A slight rebound in early November was foiled by US presidential election uncertainties and poor earnings reports from major players. The Nasdaq dropped below 2,600 - a level not seen since August 1999.
Sample findings from Hoover's IPO Scorecard for the fourth quarter of 2000:
The top 10 best-returning IPOs for Q4:
|Specialty Laboratories, Inc. (NYSE: SP)||$16.00||$33.75||111%|
|Synplicity, Inc. (Nasdaq: SYNP)||$8.00||$ 16.00||100%|
|Watson Wyatt & Company Holdings (NYSE: WW)||$12.50||$ 23.13||85%|
|Coach, Inc. (NYSE: COH)||$16.00||$28.63||79%|
|Ixia (Nasdaq: XXIA)||$13.00||$ 22.88||76%|
|Beacon Power Corporation (Nasdaq: BCON)||$6.00||$ 10.00||67%|
|Gemplus International S.A. (Nasdaq: GEMP)||$10.96||$ 17.75||62%|
|Novatel Wireless, Inc. (Nasdaq: NVTL)||$8.00||$ 12.94||62%|
|Resources Connection, Inc. (Nasdaq: RECN)||$12.00||$ 19.00||58%|
|Adolor Corporation (Nasdaq: ADLR)||$15.00||$ 22.00||47%|
- Best First-Day Gain: Transmeta Corporation 115%
Worst First-Day Drop: ImagicTV Inc. (Nasdaq: IMTV) -18%
- Of the 57 companies that went public in Q4, only 27 were trading above their initial offering price by the end of the quarter. On average, IPOs for Q4 closed the quarter 1% below their offering prices.
"It's pretty sad when you stack the colossal gains from the IPO mania of 1999 against IPO companies' major accomplishments for the year 2000 - Y2K found most companies thrilled to simply stay above their offering price," said Justin Burrows, Money editor for Hoover's Online. "This slowdown should come as no huge shock to anyone. You have high-tech sweethearts in the optical networking and biotech sectors starting to lose favor, giants like Dell and Hewlett-Packard announcing depressed earnings and once-popular offerings like Garden.com and Pets.com folding -- it's no wonder investors decided to step on the brakes and wait to see what 2001 will bring."
Hoover's IPO Scorecard includes comparisons of profitable vs. non-profitable companies, the top 10 best- and worst-returning IPOs, the top 10 biggest first-day jumps and drops, and a list of the quarter's richest CEOs. The Scorecard also includes comparisons of underwriter pricings to first-day trading prices, as well as breakdowns by exchange and industry category.
About Hoover's, Inc.
Hoover's, Inc. (Nasdaq: HOOV) provides online business information, tools, and content integration and syndication technology to help businesspeople get their jobs done. Hoover's information is available through the company's destination sites Hoover's Online and Hoover's Online U.K. (http://www.hoovers.com and http://www.hoovers.co.uk), through syndication and co-branding agreements with more than 30 other online services, and through customized applications developed for enterprise information portals, corporate intranets and business-to-business vertical and content sites. Hoover's investors include Time Warner (NYSE: TWX), Media General (AMEX: MEG.A), NBC -- a unit of General Electric (NYSE: GE), and Knowledge Universe, through its Knowledge Net Holdings and Nextera Enterprises (Nasdaq: NXRA) units. Hoover's is headquartered in Austin, TX, and has offices in Linthicum, MD; London; New York City; Reston, VA; and San Francisco.