The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1997, Landmark Communications, Inc.

DATE: Friday, January 31, 1997              TAG: 9701310536
SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 
SOURCE: BY DAVE MAYFIELD 
        STAFF WRITER  
DATELINE: VIRGINIA BEACH                    LENGTH:   60 lines

METRO'S STOCK OFFERING SUCCESSFUL MORE THAN 3.6 MILLION SHARES CHANGE HANDS ON FIRST TRADING DAY.

Metro Information Services Inc. roared into the public arena Thursday as one of January's most successful initial stock offerings.

More than 3.6 million shares of the Beach-based computer-consulting company changed hands on its first day of trading on Nasdaq's national market. The stock closed at $19.50 a share, up $3.50 from its initial offering price.

Demand for the stock among Hampton Roads clients was strong, said Thomas Love, a managing director of Wheat First Butcher Singer Inc. and manager of the brokerage's Norfolk office.

Love estimated Wheat First could have sold eight or nine times its allotment of 33,000 shares in the underwriting.

``We had some institutions that wanted tens of thousands of shares,'' he said. ``It's just one of those deals where you wish you had more stock.''

It was a big payday for Metro and its senior executives. After paying underwriting and other fees, the company cleared proceeds of $34.2 million from its issuing of 2.3 million shares. Metro founder, chairman and majority owner JohnH. Fain cleared $11.9 million from selling 800,000 shares of his stock.

In addition, several other Metro executives and one big stockholder granted the underwriters a 30-day option for a total of 465,000 shares. From that offering, Metro executive vice president Andrew J. Downing, Hampton Roads division director Janet A. Ellis and shareholder Marvin L. Welton of Raleigh, N.C., stand to clear roughly $1.5 million. Vice president Kathleen A. Neff stands to net about $2.3 million.

That is on top of another $9 million in distributions last week to existing shareholders as part of Metro's conversion from a privately owned to a publicly traded company. Metro borrowed from a bank line of credit to make that payment and it plans to use the proceeds of Thursday's offering to retire that debt and its other long-term obligations - a total of about $15 million.

Metro said its remaining $19 million in proceeds will be used to pay for future expansion, possibly through acquisitions.

The 18-year-old Metro, which has 24 offices, has a corporate Who's Who list of clients ranging from Microsoft Corp. to NationsBank. With more than 1,500 employees, it provides services ranging from specialized software development to the administration of corporate databases.

The company projected an offering price of $12 to $14 a share. But the stock shot as high as $20.75 on its initial trading day - and dropped no lower than $18.75. At its closing price, the market valuation of its 14.8 million shares outstanding was about $290 million.

Fain declined comment on Thursday's trading, citing securities regulations that limit companies' public remarks in the early weeks of trading.

But Arch Brown Jr., an assistant vice president at Scott & Stringfellow Investment Corp.'s Norfolk office, said the offering was highly successful.

Brown said there was ``huge demand'' for Metro shares locally - and that most local investors held their initial stock purchases instead of flipping them for a big profit.

``I've been telling my clients not to sell,'' Brown said. ``It's a great company.''

But he said plenty of other speculators took their money and ran. ``The fast money was in and out the first hour,'' Brown said.


by CNB