Oakley Stock Shoots Up 18% in Public Debut : Wall Street: Price opens at 23, closes at $27.125. Some 7.4 million shares in the sunglasses maker are exchanged.
Oakley Inc., whose pricey sports sunglasses grace the noses of grungy surfers and Olympic athletes alike, saw its stock rise 18% on Thursday in a strong debut as a publicly owned company.
The stock, which rose $4.125 per share from the initial offering price, thrust Oakley founder and President Jim Jannard into the ranks of Orange County’s wealthiest. Jannard, 45, sold stock worth $139 million at the opening price of $23 a share and kept shares worth $627 million based on the closing price of $27.125 a share.
Oakley’s success provides yet another indication that investors still have a healthy appetite for new offers, although the sale did not create same kind of frenzy the debut a day earlier of Netscape Communications Corp. of Mountain View, Calif. The 15-month-old software maker’s stock, which had been priced at $28 before trading, soared to $74.75 on Wednesday before settling at $58.25. The stock fell another $6.875 on Thursday to close at $51.375 in Nasdaq trading.
Some 7.4 million shares of Irvine-based Oakley were exchanged Thursday, making it the most active issue on the New York Stock Exchange. The company and its officers were offering a total of 10 million shares.
Analysts said the Oakley’s first-day performance was in line with expectations.
“We are not surprised,” said Kathleen Smith, analyst for Renaissance Capital Corp., a Greenwich, Conn., company that researches new public offerings. “These guys have a very popular product line. . . . They are a very profitable company.”
Mark Basham, a new-issues analyst for the ratings agency Standard & Poor’s Corp. in New York, added: “It’s a great company, and it will be a great company if they keep their margins up.”
Oakley earns large profit margins on its line of high-fashion sunglasses, which sell for between $40 and $225 a pair at retail. The company, which Jannard started in 1975, initially made motorcycle handgrips before turning to goggles and sunglasses. Oakley Inc. earned $8.3 million last year on sales of $124 million.
The company sold 3.3 million shares to raise at least $57 million for a new plant and debt repayment. Oakley plans to move its 600 employees to new quarters in the Foothill Ranch section of South Orange County next year.
Jannard himself sold 6 million shares, reducing his stake in Oakley from 90% to 65%. The remaining shares were sold by other Oakley executives. The company said, Jannard earned a salary of $380,670 last year. Jannard also received a bonus of $20.9 million to help defray corporate taxes that he owed as owner of a private corporation.
Jannard and other company officers were not available for comment Thursday. They were returning from New York after participating in a “road show” to introduce Oakley to Wall Street.
At the presentation, the company showed a flashy video of snow boarders, surfers and other athletes wearing Oakley sunglasses, Bloomberg Business News reported.
“Isn’t America a great country?” Jannard said as the video ended.
