CyberMedia Stock Soars on First Day

Investors scrambled for shares of Santa Monica-based software firm CyberMedia Inc. on Wednesday as the company launched its initial public offering, raising $40 million.

The stock was priced at $16 a share and rocketed as high as $21.50 on the Nasdaq market before slipping modestly to finish at $20.75--an immediate 30% gain for the lucky investors who bought in at the initial offering price.

CyberMedia issued 2.5 million shares in a deal managed by technology-stock brokerage Hambrecht & Quist of San Francisco. The offering, originally expected to be 2 million shares at about $12 apiece, was boosted to meet demand.

CyberMedia’s software allows personal computer users to diagnose and solve problems automatically without the help of technical support personnel.

The company has sold more than 1 million copies of its First Aid software. Its latest product, Oil Change, allows users to update their software over the Internet.

CyberMedia sells its products to individual and corporate users through retailers and direct mail.

The firm also plans to grow by using the Internet so customers can update its products online, by forging alliances with third-party vendors and by expanding into international markets. CyberMedia expects to introduce French and German versions of its First Aid products by the end of the year and a Japanese version next year.

Although the company’s revenue surged to $7.89 million in its second quarter from $1.01 million a year earlier, its net loss widened to $1.21 million from $94,000, as it ramped up research and marketing efforts.

The company plans to use proceeds from the stock offering for working capital and general corporate purposes.

Director Suhas Patil holds an 18% stake. He is the founder and chairman of semiconductor firm Cirrus Logic Inc.