IPO mania! theglobe.com jumps sixfold in debut

Summary:Shares of online community builder theglobe.com opened at 83 and moved up to a high of 97, and settled at 63 1/2 on its opening day Friday.

Shares of online community builder theglobe.com opened at 83 and moved up to a high of 97, and settled at 63 1/2 on its opening day Friday. Theglobe.com priced its initial public offering of 3.1 million at $9 a share.

"In recent memory, I don't know of anything coming as close to this in terms of opening prices," said David Menlow, president of the IPO Financial Network in Springfield, N.J.

The New York-based company sets up Web pages for its members for free and makes money from advertising. On Wednesday, the company said that it has revamped its Web site weeks ahead of schedule.

Theglobe.com is riding the same jet stream that carried EarthWeb Inc. (Nasdaq: EWBX) up more than 1,000 percent in its first two days trading. EarthWeb's success nearly eclipsed Broadcast.com Inc.'s (Nasdaq: BCST) opening day ascent.

"Timing, timing, timing, that's the secret to IPOs and you couldn't ask for a better time for theglobe.com than following after the EarthWeb issue this week," said Menlow.

Theglobe.com's gains are truly amazing considering the company couldn't go public just a few weeks ago. The company cancelled its IPO plans in October after the stock market turned cold to Internet-related companies.

A mix of paltry supply, broader market optimism, a positive outlook on Web companies and a dash of irrationality drove theglobe.com and other recent Internet IPOs to their lofty valuations.

theglobe.com, which competes with Geocities Inc. (Nasdaq: GCTY) and Lycos Inc.'s (Nasdaq: LCOS) Tripod, plans to offer more than 3.1 million shares. For the 12 months ending June 30, theglobe.com has revenue of $1.7 million. The company lost $5.8 million for the six months ending June 30 and has an accumulated deficit of $10.2 million.

Reuters contributed to this report.

Topics: Start-Ups

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