While Information Advantage's (IA) shares have languished around the $6 mark since the online analytical software supplier went public on 17 December, Piper Jaffrey this week initiated coverage with a strong 'buy' rating and a 12-month target of $10.
While the investment house expects IA to show a loss of $0.53 per share for fiscal 1998, it expects it to generate profits of $0.15 per share during fiscal 1999.
IA had hoped to float 3.3 million shares at between $7 and $8 to raise $30 million to pay off its debts (see Newswire 15 December, 1997), but in the end, is believed to have generated net income of only $15 million.
Relatively few shares have traded, which suggests that much of the stock has been left with the underwriters. This would indicate the shares were unpopular with investors and the price is likely to drop further once the underwriters sell their stock.
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