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Shares of started falling back to Earth on Monday after the Internet home page provider soared by more than sevenfold on its U.S. stock market debut.

After rising as high as 73 1/2 in early trading or 716 percent from its $9 offering price, the stock (TGLO) began to sell off. With more than 4.5 million shares changing hands, The's stock fell 15 to 48 1/2, still good for a gain of 439 percent.

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On Friday, the company sold 3.1 million shares to the public and achieved the best first-day performance for a U.S. stock, easily surpassing the 249 percent one-day gain achieved by earlier this year.

New issues typically see their stock price fall after the initial hype associated with the IPO dies down, especially when the run-up is dramatic.'s stock, for instance, still hasn't returned to the high reached on the company's first day of trading.

The meteoric new issue came only weeks after had to shelve its IPO because of a moribund new-issue market. But after the strong performance of newly public Internet technology site developer EarthWeb (EWBX), lead underwriter rushed, which had already gone on its pre-IPO road show for institutional investors, back on the calendar.

Some on Wall Street were skeptical about's slingshot price, pointing to investor fervor over Internet stocks rather than the company's business model.

"People feel like, 'I don't care what it is, just get me in,'" said David Menlow, president of the IPO Financial Network in Millburn, N.J. "There's nothing innovative or singular about the company."

EarthWeb's stock also took a hit Monday, falling 5 to 62, still 343 percent above its offering price.

In other IPO news:

  • In other IPO news, General Motors (GM) filed to sell shares of its Delphi automotive component manufacturer subsidiary to the public in an upcoming IPO. Delphi Automotive Systems estimated the offering, which has been anticipated, could raise as much as $1.5 billion, but a specific pricing rangwas not included in the prospectus filed with the Securities & Exchange Commission, but Delphi.

    GM plans on spinning off its stake in Delphi to its shareholders sometime in 1999, according to the document. Delphi, which has received about 79 percent of its sales so far this year from GM, said in the prospectus that it believes the spin-off will allow it to expand its business more effectively.

    "Although we will strive to maintain our important customer-supplier relationship with GM, we believe that our principal opportunity for future earnings growth will be increased sales to customers other than GM-North America," the company said.

  • American depository receipts for the 12 holding companies that make up Brazilian telecom giant Telebras have begun trading on the New York Stock Exchange on a when-issued basis. The separate companies were formed in July after the Brazilian government sold its interests in each of them for more than $19 billion, and trading in the 12 stocks began in late September on two Brazilian stock exchanges. The American receipts should be issued and available for regular trading later this week. Telebras (TBR) investors received shares in each of the new companies in a 12-for-1 stock swap.

Written By Darren Chervitz

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