Amid a market of as-yet unseen volatility, two wireless Internet content firms commenced with initial public offerings last week that so far have enjoyed moderate degrees of success.
First to emerge was i3 Mobile Inc., formerly Intelligent Information Inc. The company aggregates Internet-based content like news, sports scores and stock quotes for a number of wireless carriers, who may brand it as their own and offer it to subscribers as a separate service.
The company issued 5.1 million shares Thursday, priced at $16 a share. The stock rose $9 during the day to close at $25, after rising as high as $30.50 during the course of trading. The following day, it fell $5 to $20.
The IPO raised a total of $81.6 million. Deutsche Banc Alex. Brown acted as lead manager for the IPO.
The company reported a net loss of $10.2 million last year on revenues of $1.73 million.
The 5.1 million shares offered is more than the 4.4 million originally planned. The company has 22.1 million shares now outstanding.
Then on Friday, GoAmerica Inc. initiated its IPO. The company is more of a content service company than an aggregator. It calls itself a wireless Internet service provider, similar to America Online Inc. in the wired world. The company has several channels of content, which subscribers pay monthly to access via wireless phones, pagers, personal digital assistants or wireless modem-equipped laptop computers.
“We’re really about providing access to the broad Internet, not focused on Web Clipping or WAP, [but] any device out there used in a mobile setting,” said Joe Korb, GoAmerica executive vice president.
GoAmerica offered 10 million shares at $16 a share. Although selling for a time at a high of $18, the stock primarily hovered at its offering price. Bear, Stearns & Co. Inc.; Chase H&Q; U.S. Bancorp Piper Jaffray; Wit SoundView; and DLJdirect Inc. managed the offering.
On the day of the IPO, GoAmerica announced a system that combines laptop computers equipped with wireless modems and digital cameras that allows quicker processing of needed organs for transplant purposes. It was adopted by the New York Presbyterian Hospital Organ Preservation Unit.
Both IPOs came amid Wall Street’s most volatile week ever, and during a lag in the cyclical nature of the IPO market.
“Our interest in getting to capitalize in the market was based on building the company,” said GoAmerica’s Korb. “The reality is we have been telling a consistent story despite the market volatility.”
Analysts say the IPO market slows down every year or so as demand falls. Currently, there is an overwhelming glut of Internet-related stocks going public, and many have had disappointing IPO results. However, wireless data IPOs have bucked this trend, retaining investor interest.
“I think generally people understand the wireless Internet has the same trajectory as the cellular and wireless Internet markets, and they need not be skittish at this point,” Korb said.
