One would think Wall Street wouldn't welcome another Internet firm that promises to help other companies stake out, design and maintain a patch of ground on the World Wide Web.
But Organic, Inc. isn't just another Internet company. It has been around for some eight years, has an impressive client roster and the backing of an advertising juggernaut — all ingredients for a successful public offering. Organic's stock nearly doubled Thursday, its first day of trading on the Nasdaq market.
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"It was nectar from the Gods... Next week will be another sip."
— John Fitzgibbon
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The pot of money dumped on Organic was just a small portion of the seemingly unending stream of cash Wall Street is ready to deliver for high-tech companies, despite this week's dizzying market fluctuations and the specter of computer hackers hijacking the Internet. In a flurry of deals, close to twenty companies were priced this week, and some twelve more are on deck for next week.
Software company Witness Systems was also a big winner Thursday when its stock shot up some 100 percent. Impressive gains have so far been seen from software makers Delano Technology, which climbed 180 percent on its first day of trading Wednesday, communications gurus Cypress Communications which saw a more modest 20 percent gain, and online health care coordinator XCare.net, which ended Thursday at 73 percent over its initial offering price of $18 a share.
Even Internet retailer Buy.com, a site which was shut down by hackers Tuesday, the same day it hit Wall Street, managed an impressive opening performance.
"It was nectar from the Gods," said John Fitzgibbon, an IPO analyst with Redherring.com. "Next week will be another sip. A couple of knee-jerk reactions in the stock markets in either direction isn't going to effect this juggernaut."
Organic, Inc. was priced at $20 but opened the trading day at $51. Investors drove the stock up to a high of $60 before letting it settle at a little over $40 toward the end of the trading day. Some 5.5 million shares were released, raising the company $110 million, which it says it will use for general corporate purposes.
The company was born in 1993, making it the old man on the block when it comes to high-tech companies. Still the firm boasts a client list some 250 strong, including notables like Barnes & Noble, Blockbuster and the Home Depot.
Those kind of high-profile clients helped the professional services firm rake in over $27 million in 1998, which curbed the companies net earnings that year to a $2 million loss.
The advertising behemoth Omnicom owns close to 20 percent of the company.
In entering the arena of guiding companies onto the Internet and helping them along once they are there, Organic is entering a crowded field. Companies such as Agency.com, Razorfish, iXL Enterprises, Scient, USWeb/CKS all are vying for the same lucrative pie slice.
Can I Get a Witness?
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The company's initial public offering came on more like Pennies from Heaven
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The other offering that had investors drooling all over the Nasdaq trading floor Thursday was Alpharetta, Ga.-based Witness Systems. The company creates what it calls "multimedia recording and analysis software," which helps companies enhance their customer interactions.
In other words, the company lets managers and supervisors monitor their customer service personnel to make sure they are doing the best and most efficient job they can.
It brings together the voice conversations of their clients' customer service people and matches that up with the key strokes being entered and data being retrieved on the employee's computer. Managers can mull over this information either while the "interactions" are occurring or analyze them later in order to come up with new ways to improve the system.
If it sounds like something out of George Orwell, the company's initial public offering came on more like Pennies from Heaven.
The stock nearly doubled Thursday after pricing its 3.8 million shares at $20 a share, high above a range of $15 to $17, which was itself raised from an earlier projection. The stock was trading at close to $40 a share late in the day.
Witness Systems is riding high on enthusiasm for companies offering customer management software, a sector analysts say is booming.
