Shares of online investment bank Wit Capital (Nasdaq: WITC) climbed more than 27 percent on Monday, gaining 4-13/16 to22-3/8 after the company announced that it will purchase investment bank Soundview Technology for approximately $320 million in stock and options. The deal will bolster both Wit Capital’s investment banking and research departments. Wit Capital says the deal will raise its nine-month 1999 revenues from $27 million to$127 million on a combined basis. Wit Capital’s customers could benefit significantly from this deal. Buying Soundview will give Wit Capital access to more initial public offerings and other equity offerings. The likely result will be the distribution of more IPO shares to Wit Capital’s customers.
Soundview is part of the underwriting team for several Internet IPOs that are expected to be hot. These offerings include this week’s most buzzed-about IPO, Cobalt Networks, which manufactures server appliances. Other IPOs that Soundview will be participating in include that of online auction software company OpenSite Technologies and Internet service provider Fastnet.