Magazine article American Banker

Planned Stock Offering Lifts Telebanc 21%

Magazine article American Banker

Planned Stock Offering Lifts Telebanc 21%

Article excerpt

Continuing a phenomenal rise, shares of Telebanc Financial Corp. closed Thursday at $83.06, rising 21% since the previous Friday.

Analysts attributed the boost to a management road show intended to promote the thrift's alternative-delivery strategy as it prepares for a secondary stock offering.

"The road show is helping them out because they have a pretty good story to tell," said Charles Wittmann, an analyst at Wheat First Union.

Telebanc, with $2.3 billion of assets and $1.1 billion of deposits, conducts all interactions with customers via the Internet, telephone, and mail.

The Arlington, Va., company's stock has risen dramatically from the 52- week low of $8.125 on Oct. 8, 1998. On Feb. 11 it filed for the secondary offering for up to $250 million in shares.

Proceeds would be used to retire $32 million of debt and support a growing deposit base, which increased 110% in 1998, according to the filing with the Securities and Exchange Commission.

The thrift has 12.5 million shares outstanding. The offering would be managed by BancBoston Robertson Stephens, CIBC Oppenheimer, Goldman, Sachs & Co., and Legg Mason Wood Walker Inc.

The stock prices of other Internet-oriented companies also are rising. NetBank Inc. of Atlanta, for example, rose 15% last week, to $75.5 on Thursday.

Mr. Wittmann said fund managers were pouring money into stocks as the first quarter came to a close.

"A lot of them are under pressure to perform, and sitting on cash in this kind of a market is not the thing you want to be doing," he said. …

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