January 15, 1999 2:00 PM PST

Marketwatch.com IPO stuns the Street

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Online financial site MarketWatch.com shot out of the gate today, with an initial public offering that soared more than fourfold above its target price on the first trade of the day, signaling a strong return of Internet IPOs.

Marking one of the first major Internet IPOs of the new year, MarketWatch.com's offering had priced at the high end of its range last night, at 17 a share, raising $46.75 million for the company.

But on the company's first trade of the day, it soared up to 90 a share, and in midday trading saw a high of 130 before retreating to close at 97.5, up 8.05 points. The stock gained a whopping 473.53 percent--not bad for a day's work.

Demand for the issue was anticipated to be strong, as the pricing range was increased twice. Initially the shares were priced at between 10 and 12 per share, and later that range was raised to between 14 and 16 per share. Then last night, the company again bumped it up to between 16 and 17 per share.

With 2.75 million shares floated, MarketWatch has a market valuation of $1 billion, based on its 11.7 million outstanding shares and the first trade of the day.

"We're in a hot market," said Kathleen Smith, portfolio manager with Renaissance Capital's IPO Fund. "There's not enough deals on the calendar to satisfy investor interest."

Other Internet companies that more than doubled their price on their first days of trading include online community Xoom.com, which jumped 145 percent; online auctioneer eBay, which soared 163 percent; and Ticketmaster Online-CitySearch, which tripled its share price right out of the chute.

Formed as a joint venture between CBS and Data Broadcasting Corporation, MarketWatch will be able to leverage its relationship with CBS as a marketing tool and its relationship with Data Broadcasting for technological infrastructure, analysts said. They noted that those partnerships will enable the company to carve out a niche in the highly competitive online business news market.

Reuters contributed to this report

 

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