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.com, Leslie Walker
For Good or Ill, IPO Market Has Heated Up


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The .com column in the July 22 Business section gave the wrong time frame for Odimo Inc.'s $14 million loss on $10 million in sales. Those results were for the first quarter of this year, not for all of 2003.

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By Leslie Walker
Thursday, July 22, 2004; Page E01

Odimo was my tip-off that Googlemania is out of control.

Never heard of Odimo? My point exactly. It is an obscure Internet jeweler that filed last Friday to sell stock to the public for the first time, even though it lost $14 million on measly sales of $10 million last year.

Read the prospectus for its initial public offering and you'll discover that the Sunrise, Fla., retailer is controlled largely by an Israeli diamond mogul, has a husband-and-wife team as its chief operating and financial officers, and is being sued by handbag designer Prada for allegedly selling counterfeit goods.

Odimo Inc. joins a crop of three dozen or so dot-coms and wireless service providers jockeying to join this year's class of new public companies. Among the 2004 would-be IPOs are comparison shopping service Ltd.; PlanetOut Inc., a Web service for gays; Web-based realtor ZipRealty Inc.; online liquidator SmartBargains Inc.; and Jamdat Mobile Inc., which provides games to cell phones.

While some are profitable, others are money-losers apparently hoping to ride any boomlet in the wake of the much-hyped Google Inc. stock offering. Web search star Google is planning to raise about $2.7 billion through an unusual public stock auction soon.

Already, the IPO market has revived in a big way after three years of stagnation. About 120 companies have gone public so far this year, compared with 86 during all of 2003, according to investment bank researcher Dealogic.

An additional 265 privately held companies have notified the Securities and Exchange Commission of their intention to sell stock, up from 29 this time last year.

Yet this year's IPO class is very much a buyer's market, unlike the seller's heyday of the 1990s. Few companies going public nowadays see their share prices double, as many did in the 1990s. And with share prices sliding on the Nasdaq Stock Market this summer, many new issues are already underwater from their initial offering prices.

That especially holds true for technology start-ups, which have not fared particularly well since they started creeping back into the public markets last year. Share prices for the 60 technology companies that have sold stock since January 2003 have declined an average of 5 percent, according to, which tracks initial offerings. By comparison, the average price for all 189 companies going public during that period has jumped about 11 percent.

Only a half-dozen Internet companies have gone public this year.

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