Knight Ridder/Tribune Business News
May 21 -- Cyber-retailer eToys found the stock market to be child's play yesterday.
Priced at $20 a share Wednesday night, the stock rocketed in its debut, soaring as high as $85 before settling at $76.56.
That gives the small but popular Internet toy-seller a stock market value of $7.8 billion, far above that of toy giant Toys "R" Us, which has been slow to move to the Internet. Toys "R" Us shares fell 3/16 yesterday to $22.68, giving it a market value of $5.6 billion.
The stunning coming-out party for eToys pumped up the paper riches of company founder and CEO Toby Lenk, who holds 7 percent of the stock, to $574 million. It increased the value of the 25 percent controlled by Bill Gross' idealab! to $1.9 billion.
Analysts said eToys had the potential to transform the toy industry the way Amazon.com changed the book industry.
"We believe that eToys will become a $10 billion company in the next decade," said Christopher Vroom, an analyst at Thomas Weisel Partners. "It is a blue-chip E-tailing company and has the potential to become one of the great growth stories of the next decade." The hype over Internet IPOs will continue: drugstore.com -- an online drugstore -- filed to sell shares to the public just 2 1/2 months after launching its site. The company has attracted some high-powered financial backers, including billionaire Microsoft co-founder Paul Allen and Amazon.com.
Meanwhile, next week's IPO calendar is filled, with a total of 17 deals that could raise as much as $1.6 billion.
Among them: barnesandnoble.com, the online operation of bookstore giant Barnes & Noble; Internet service provider Juno, and DLJdirect, the cyber-brokerage arm of Donaldson, Lufkin & Jenrette.
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