IPO MATCH-UP; STEWART, WWF DO WELL ON FIRST DAY OF TRADING.
Would Martha Stewart stand a chance against Stone Cold Steve Austin? It might be a one-sided bout in the wrestling ring, but on Wall Street, Martha is proving to be a contender.
Companies associated with Stewart and pro wrestling both had hugely successful initial public offerings Tuesday, richly rewarding entrepreneurs who have succeeded in capturing devoted audiences through television, magazines, the Internet and merchandising.
It's hard to imagine those audiences having much in common - unless gladiator-esque titans like The Rock start donning aprons and baking Christmas cookies - but investors seem to agree that both companies offer tremendous value.
Shares of both World Wrestling Federation Entertainment Inc. and Martha Stewart Living Omnimedia Inc. soared well above their offering prices in heavy trading, though both ended off their high levels for the day.
Stewart rang the opening bell at the New York Stock Exchange, a privilege often offered to executives bringing their companies public. What followed was a frenzy to buy up shares in her company.
Omnimedia's shares ended at $36.6250, off from its high of $49.50, but well over the offering price of $18 per share. The stock was the eighth-most traded on the NYSE.
The WWF also had a body slam of an opening. It ended at $30 per share after going as high as $35, way over its offering price of $17. WWF was the fourth-most traded stock on the Nasdaq Stock Market.
The rave reception for both companies marked a ringing endorsement for a strategy skillfully employed by both companies: delivering a specific niche audience to advertisers and eventually dominating the niche completely.
``We pioneered a new media category which is called lifestyle,'' Stewart said in an interview on CNBC. ``Nobody else ever did it before, and we did it, and we intend to really dominate this area for a very long time to come.''
Stewart uses two television shows, two monthly magazines, a radio show, a syndicated newspaper column and a Web site to dispense sensible ``how-to'' information for homemakers on cooking, gardening, and keeping homes running smoothly. She has also sold 27 books.
The WWF, for its part, has a hammerlock on the young, male TV audiences coveted so badly by big advertisers. Its main show, Raw is War, was the top-rated regularly scheduled cable TV program for 19 weeks through June 1999. WWF also produces 200 live events a year, creating story lines for more than 100 wrestling characters.
Targeting niche audiences is a media strategy used often with success by giant conglomerates like Time Warner Inc., where Stewart worked until two years ago. But it's less often that media entrepreneurs are able to start new companies from scratch and build up multiple media properties around them.
Both the WWF and Stewart have grown explosively in the past few years.
The WWF - which dwarfs its competition World Championship Wrestling, owned by Time Warner - earned $56 million in its last fiscal year on revenues of $252 million, up sharply from profits of $8.5 million the year before on revenues of $126.2 million. Stewart's Omnimedia had net income of $13 million last year on revenues of $180 million, compared to profits of $7 million on revenues of $109 million a year earlier.
Katherine Styponias, a media industry analyst at Prudential Securities, says both companies owe their success to doing ``a tremendous job building their brands . . . If you're able to cultivate premier content on its own, broadcasters will seek you out.''
PHOTO (1 -- color) NYSE president William Johnston and Martha Stewart anticipate the market's opening bell the day of Stewart's Omnimedia's IPO.
Richard Drew/Associated Press
(2 -- color) Stone Cold Steve Austin, right, has a grip on The Rock at a World Wrestling Federation contest before the federation went public.
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|Publication:||Daily News (Los Angeles, CA)|
|Article Type:||Statistical Data Included|
|Date:||Oct 20, 1999|
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