IPOs IN REGISTRATION – FreeMarkets Inc. –

PITTSBURG, Pa. – FreeMarkets Inc., an online auction company, went public December 10, offering 3.6 million shares at $48 apiece. The company’s stock priced well above its $40 to $42 filing range.

Goldman, Sachs & Co., Morgan Stanley Dean Witter, Donaldson, Lufkin & Jenrette and Wit Capital Corp. underwrote the initial public offering, which left 33.9 million shares outstanding.

There were no selling shareholders. Venture backers included CSM Partners, Saturn Capital Inc. and United Technologies Corp.

The company creates customized online business-to-business auctions for buyers of industrial parts, raw materials and commodities. FreeMarkets’ BidWare software links buyers with sellers in timed reverse auctions where suppliers place bids to fill an order. The company’s clients have included PepsiCo Inc., United Technologies Corp. and General Motors Corp. FreeMarkets collects fees for conducting the auctions and occasionally takes a percentage of a buyers’ savings.

The $158.5 million in proceeds expected from the IPO will be used for general corporate purposes, including working capital, and for the possible acquisition of complementary businesses or technologies.

FreeMarkets was not profitable in 1997, when it lost $1.1 million, but then earned $234,000 in 1998.

No venture backers have joined the company’s board of directors to date.

FreeMarkets – Selected Financial

(in thousands, except per share data)

Year Ended December 31 Nine Months Ended September 30

1996 1997 1998 1998* 1999

Total revenue 409 1,783 7,801 4,802 13,037

Net income (loss) -1,431 -1,061 234 89 – 13,479

Net income (loss) per share -.14 -0.1 0.02 0.01 -1

*Unaudited