Investors Bid Pete’s Brewing IPO Up 40% : Stocks: Microbrewer’s $18-a-share offering is pushed to $25.25 on first day of trading.

Pete’s Brewing Co. stock rose 40% in its first day of trading as investors bid up shares of the craft brewer’s $54-million initial stock offering.

Pete’s Brewing shares were priced at $18 in the offering and closed at $25.25 in Nasdaq trading.

“It’s wild,” said Benj Steinman, editor of industry newsletter Beer Marketer’s Insights. “There is just a mania going on right now with these micros. It’s going on in the public, and now with investors too.”

The brewer’s loyal customer base, the rapid growth of the craft brewing industry, and investors who missed out on shares of the last craft brewer to go public, Redhook Ale Brewery Inc., were cited by analysts and investors as reasons for the offering’s performance.

Redhook’s initial stock offering rose 53% on its first day of trading in mid-August, and industry leader Boston Beer Co. is expected to sell shares in a public offering later this month.

The offering was priced at the high end of the price range of $16 to $18, an indication of strong investor demand for the shares. Lead underwriter Morgan Stanley Group Inc. increased the price range from $14 to $16.

Palo Alto-based Pete’s is the second-largest major domestic specialty brewer in the United States, second only to Boston Beer, maker of the Samuel Adams line of brews. The company’s lead beers, Pete’s Wicked Ale and Pete’s Wicked Lager, have won various U.S. beer competitions over the past several years. The company also sells other beers under the same Pete’s Wicked label.

Pete’s reported net income of $844,000, or 10 cents a share, on revenue of $41.9 million, in the quarter ended Sept. 30, compared to earnings of $306,000, or 4 cents a share, on revenue of $21.3 million a year ago.

According to Beer Marketer’s Insights, Pete’s shipped 180,000 barrels of beer in 1994, compared to Boston Beer’s 714,000 barrels.

Of the 3 million shares sold in the offering, the company sold 2.25 million shares, while existing shareholders sold another 750,000.

The company said it will use the majority of the money raised in the offering to build a $30-million brewery on the West Coast. Some of the money may also be used for other capital expenditures, to repay debt, for general purposes or for acquisitions.