Internet is no longer a terrorizing word to investors

Elena Molinari

NEW YORK: The market for new equity issues must really be getting better if
investors are willing to take a look at a company like Lawson Software Inc.

There is nothing wrong with Lawson Software, which will go public this week.
But the fact that the word "Internet" is mentioned 10 times in the
company's prospectus would have spooked away most potential buyers a few months
ago.

But times have changed.

"Investors are looking at earlier-stage and higher-growth
companies," said Doug Fawell, head of equity capital markets at UBS Warburg.
Lawson Software, which aims to raise up to $205 million through Lehman Brothers
and J P Morgan, develops software for management applications and e-commerce
solutions.

The last Internet-related company to come to market was Convergent Group
Corp., which held its IPO in July 2000 and was later acquired by oil-services
giant Schlumberger Ltd. Since then, Internet stocks have been mostly a source of
disappointment for their shareholders.

"Investment bankers are testing the waters to see if investors are ready
for this kind of issue," said Tom Taulli, analyst at NetCap Ventures and
author of the book "Investing in IPOs." "If they are, next year
bankers can literally flood the market with high-tech IPOs."

Investors may be more open to technology, warned Fawell, but they are still
very selective. "We all anticipate that technology will come back," he
said. "But when it does it will be more heavy-duty software companies, of
the likes of Oracle, or infrastructure companies, or Internet security
companies."

Lawson Software, to be true, is not exactly a dot-com start-up. It was
founded in 1975, and, most of all, it has already turned the corner of
profitability.

To play on the safe side and attract investors, Lawson a month ago lowered
its expected price range to between $13 and $15 from between $15 and $17. The
price is appealing, Taulli said, especially considering that some battered
high-tech stocks have surged lately.

Demand is stronger, volume still low

Encouraged by staggering gains in the broad market -- the Dow industrials rose
8.6 per cent, the Nasdaq 14.2 per cent in November -- investors snapped up
shares of 12 new equity issues last month, making November the second most
active month for IPOs this year. November IPOs gained an average 15 per cent on
the first day of trading.

December is poised to break that record, bringing to market 13 IPOs -- while
only eight were priced in December 2000 -- as bankers rush to capitalize on the
recent market run-up before the traditional two-week year-end break in stock
offerings.

Next week alone bankers will offer to investors nine new stocks in six
different sectors. It will be the busiest week of the year. What the IPO market
is still lacking is volume, market watchers say. In November the 12 IPOs raised
only $1.4 billion, just four per cent of all the IPO dollar volume this year,
according to Frank McGee of Dealogic.

December volume will be over $5 billion, but the $3 billion offering from
insurer Prudential Financial will make up the bulk of it.

"People are looking to put money back in the equity market, especially
with Treasury yields so low," said a banker who declined to be identified.
"But December offerings will provide little guidance. We'll judge the IPO
market's health from next year's round."

On this week's IPO calendar there is also Aluminum Corp of China Ltd. (Chalco),
the world's third-largest alumina refiner and China's largest aluminum producer,
which was created just two months ago. It will seek a public listing in New York
under the symbol "ACH", as well as in Hong Kong. It aims to raise up
to $480 million through Morgan Stanley and China International Capital Corp.

(C) Reuters Limited.