NEW YORK – EarthWeb Inc., a provider of Internet-based online services to the information technology community, went public November 10, offering 2.1 million shares at $14 apiece. Stocks priced at the high end of the company’s $12 to $14 filing range.
The initial public offering, which left 7.9 million shares outstanding, was underwritten by J.P. Morgan & Co., Bear, Stearns & Co., Volpe Brown Whelan & Co. and Wit Capital Corp.
Warburg, Pincus Ventures, L.P. was the company’s sole venture backer. The firm sold 189,000 shares because the underwriters exercised the over-allotment option in full.
EarthWeb’s collection of Web sites, including developer.com and datamation.com, offers content, commerce and chatrooms for IT professionals who can access technical resources, books and tutorials. In addition, the company offers bulletin boards and question-and-answer sessions in which IT professionals can share information. The company’s online shopping service features in excess of 700 products from more than 100 vendors. EarthWeb generates virtually all of its sales from advertising.
The $26.14 million raised by the IPO will be used for general corporate purposes, including the expansion of sales and marketing capabilities, possible strategic acquisitions or investments, international expansion and working capital requirements.
The company has not been profitable since it was incorporated and launched operations in 1996, losing $2 million in 1996 and $7.8 million in 1997. During the nine months ended September 30, 1998, it lost $5.3 million.
Representatives of Warburg, Pincus Ventures hold two board seats. Henry Kressel, a managing director, has been on the board since October 1996, and Cary Davis, a vice president, joined in February 1998.
EarthWeb – Selected Financial
(in thousands, except per share data)
Year Ended December 31, Nine Months Ended September 30
1995 1996 1997 1997 1998
Net revenue 472 1,135 786 1,918
Net income (loss)
-640 -2,046 -7,821 -5,009 -5,272
Net income (loss) per share
-0.22 -0.7 -2.67 -1.71 -1.72