Judging from what happened before WorldSpace Inc. went public in August, the Silver Spring-based satellite radio service should have pulled off Washington's hottest initial public offering since the Roaring '90s.
WorldSpace aims to become the overseas equivalent of XM Satellite Radio, the nationwide pay-to-listen broadcaster based in the District that has signed up 5 million subscribers in only three years.
"The Next XM" was all some investors had to hear. They were so eager to put money into WorldSpace that the IPO was increased from fewer than 9 million shares to almost 12 million. The original $16 asking price for the stock was increased twice, first to $20 a share, then to $21.
Sure enough, WorldSpace shares traded as high as $25 on Aug. 4, the day of the IPO.
It's been downhill since. The stock skidded to just $14.47 a share at the close of Friday's trading.
In two months, WorldSpace investors have lost $80 million -- making it not the best local IPO of the year, but effectively tied for the worst.
A dozen companies based in the District, Maryland and Virginia have gone public this year. Five more are in the midst of the IPO process. The region is on track to roughly match the pace of 2004, when 16 companies sold shares for the first time.
As far as Washington investors are concerned, however, this year's IPO class is a bunch of underachievers. Only three have made serious money for IPO investors: NeuStar Inc., a Northern Virginia communications company whose stock is up 41 percent; Alpha Natural Resources Inc., a Southern Virginia coal company, up 39 percent; and DiamondRock Hospitality Co., a Bethesda hotel operator, up 12 percent.
Five other IPOs are trading a few cents above or below their offering price. Four are down more than 10 percent, with WorldSpace showing the biggest percentage decline and the biggest loss of investors' money.
While WorldSpace was a concept that investors could easily get their heads around, the region's top-performing IPO this year turned out to be an obscure business that few people can understand.
The hot IPO was NeuStar, a Sterling company that provides services to the communications business -- conventional telephone companies, cell phone companies and the new breed of Internet phone services.
"We are the hub of the telecommunications industry," said Chief Financial Officer Jeffrey A. Babka, because NeuStar helps route calls over different types of networks, different service providers, different communications technologies.