Three companies went IPO in one day yesterday, the first time that has happened since last December, according to Reuters and CBS MarketWatch. (The New York Times, apparently consulting a different database, said it was the first time since September 2000.) The standout offering on what MarketWatch called a "trifecta" day was Netflix, an online retailer, offering a service that lets subscribers rent DVDs by mail.
The San Jose Mercury News reported on a "now-rare valley scene" in which "champagne corks popped as Netflix employees held an early-morning toast," and noted that the net worth of CEO Reed Hastings had jumped by $50 million in a day. The Merc didn't mention Aeron chairs, however.
Outlets covering the story did the obligatory harking back to the go-go days of dot-com IPOs. Dow Jones wrote that Netflix's offering was unusual given that the company "is cut from the same cloth as many of the dot-coms that went from defining the IPO market of the late 1990s to representing the worst of the excesses of that era." (The company has not yet had a profitable quarter.) The AP put it more bluntly, quoting the president of IPOfinancial.com: "There are still people out there who wake up screaming in the night when they hear the word 'dot com.'" A few outlets mentioned that the company had excised "dot com" from its name ahead of the IPO.
Netflix closed yesterday 12% above its offering price, which was at the top of the expected range of $13 to $15. The other two IPOs of the day, EON Labs, a pharmaceutical company, and Altiris, a software maker, ended up as what CNN called "broken deals," closing below their offering prices.
Most outlets that went beyond the basics of the Netflix IPO quoted analysts who admired, if cautiously, the company's recent record of adding customers and cutting losses. Several accounts mentioned that Netflix had first filed to go public in 2000 before withdrawing the offering as the bubble popped. Reuters, in a story carried in Forbes, wrote that the IPO "got a lot of mileage from buzz surrounding Netflix's product," adding that many of the investors the company pitched "had already subscribed to the service and said they use it regularly." A company with products investors actually use: Talk about a unique business model. - Keith Dawson
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