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Denver Post--E-marketer makes hay in IPO |
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The Denver Post Online - Business E-marketer makes hay in IPO By Jennifer Beauprez Denver Post Business Writer Nov. 20,1999 - Hoping to get in early on the exploding business of electronic marketing, investors Friday gobbled up the initial public offering of Exactis.com Inc. Share prices of the Denver-based email messaging company skyrocketed after just two hours of trading to a high of $36 - more than double its $14 offering price. The stock, trading on the Nasdaq market under the symbol XACT, closed at $24 Friday after 8.6 million trades. "It's an enormously exciting time, and it's a reflection of what's gone into building the company,'' said an exhausted Tom Detmer, Exactis' chief executive, who returned to Denver on Friday after a nine-day IPO road show. The 135-person company raised $50 million in the offering, which will be used for new products and general corporate expenses. Exactis handles high-volume e-mail marketing pitches, newsletters and trade confirmations for 75 business customers such as American Express, Sony Music's InfoBeat and Charles Schwab Corp. Detmer, who joined the company in January, holds a 1.9 percent stake worth $5.5 million. John Funk, the company's former chairman, owns 4.1 percent, worth $11.9 million. Linda Fayne Levinson owns 7.8 percent, worth $22.6 million. A principal of investment firm Global Retail Partners and a former American Express executive, Levinson sits on Exactis' board of directors. Early investors American Express, the Centennial Fund, Telecom Partners, Retail Partners and Boulder Ventures own a total of 51.6 percent of the firm. Exactis lost $6.2 million on sales of $7.2 million during the first three quarters of this year. Investors don't seem to mind. They want to get in early on what is expected to be a $900 million market in the next five years, said Rich Peterson, an analyst who follows the e-marketing industry for San Francisco investment bank Volpe Brown Whelan. "Companies want to talk to customers through e-mail, and they're going to spend a lot of money to do that,'' Peterson said. "Exactis has a good reputation in the industry.'' He said companies are expected to spend more than $8 billion on Web advertising by 2002 and invest $20 billion more in buying and building communication systems so they can talk to customers. Exactis competes with at least 40 other e-messaging companies, including Excite@Home's MatchLogic in Louisville, USA.Net in Colorado Springs and MessageMedia in Boulder. "I think e-mail marketing is going to replace a lot of direct-mail marketing,'' said analyst Tara Long of investment firm CE Unterberg Towbin in San Francisco. Long said e-mail marketing is faster, cheaper and easier to measure in consumer responses. E-marketing companies such as Exactis must walk a fine line to avoid invading consumer privacy with electronic marketing pitches. Exactis came under fire this month when it accidently leaked to advertisers the e-mail addresses of its InfoBeat subscribers. With 12 million shares outstanding at $24 each, the IPO gives Exactis a market capitalization of $288 million. Started in 1996 as Mercury Mail Inc., the company a year later changed its name to InfoBeat, offering free news and information to e-mail subscribers. In January, Sony Music Entertainment bought the InfoBeat newsletter business, and the remaining company became Exactis.com. Ed.: Exactis.com did not remain around very long as a public company. On February 28, 2000, 24’7 Media Inc. announced it had entered into an agreement to acquire Exactis.com in a stock for stock merger pursuant to which Exactis.com would become a wholly owned subsidiary with the shareholders of Exactis receiving .6 of a share of 24-7 for each share of Exactis. A S-4 registration statement covering the merger was filed on April 18, 2000 and amended on May 22, 2000. The merger was completed on June 28, 2000. On February 28, 2000 (date of announcement) 24/7 Media traded at $49. a share and Exactis at $18..69 and based on the merger ratio the equivalent value of Exactis was $29.70 a share. On April 18 when the Form S-4 was filed, the comparative figures were $22.38, $12.19, and $13.43; on May 22 when the amended S-4 was filed the comparative figures were $16.88, $9.75, and $10.13. On June 25, 2004, the price of 24/7 Media (TFSM) was $5.65 a share or for the Exactis shareholder who was still holding his/her shares the equivalent o $3.39 per Exactis share. According to a chart available on Nasdaq, 24/7 Media stock price was down to less than $2.00 a share by July of 2001; $0.10 a share by October of 2001; in the $1. to $2.00 area from December 2002 to April of 2003, and went to a high of $11 a share by February of 2004.
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