E*Offering, the online investment bank partially owned by E*Trade, is reporting that its public offering as a lead underwriter raised $73 million (US$) for e-commerce technology and service provider, First Sierra Financial, Inc. (Nasdaq:BTOB).
In a secondary offering last week, E*Trade’s asterisk twin sold 4 million shares of First Sierra Financial that were initially priced at $18.25 per share. The price rose as high as $27 earlier this week before settling back under $26 at the close of trading Wednesday.
“This transaction is a milestone in the evolution of investment banking,” said E*Offering’s Managing Director of Corporate Finance, Tim Newell. “As the largest stock offering by an online investment bank, as well as the first stock offering by an Internet company to be managed by an online investment bank, we are pleased with the success of our first lead-managed deal.”
E*Offering is not resting on its laurels. It has an initial public offering scheduled Thursday for Green Mountain, a company that offers environmentally sound electricity and products online. The bank will co-manage the IPO.
Established earlier this year, E*Offering will also co-manage upcoming IPO’s for PCQuote, an online financial data and business news site, Bamboo.com, a provider of online virtual tours for the real-estate industry and InsWeb Corp., an online insurance marketplace.
Improved IPO Access
E*Offering says its mission is to help companies gain access to capital, lessen their underwriting costs, reduce the time it takes to get then to market, broaden the distribution by opening up the IPO’s to individual investors and enhance shareholder communication.
In announcing the formation of the company back in January, E*Offering said that E*Trade’s 28 percent ownership stake in the bank would give them a conduit to distribute up to 50 percent of every IPO to online retail investors, a figure higher than traditionally distributed. E*Trade’s customers are generally given first access to the offerings. Under the agreement, E*Trade has an option to increase its stake in the bank to 51 percent.
E*Trade, one of the Internet’s resounding commercial success stories, participated in 25 IPO’s in 1998 and plans on doing many more this year, the company’s CEO says.
E*Offering was founded by Walter Cruttenden, former CEO of investment banker, Cruttenden Roth. In addition to E*Trade, Sandy Robertson – an influential industry investor who founded Robertson Stephens in 1978 and recently resigned as chairman – has invested in the bank.