MP3.com Inc., which operates a Web site for downloading music, raised $344.4 million in an initial stock sale Tuesday as investors flocked to new offerings despite a plunge in technology shares.
The San Diego-based company sold 12.3 million shares at $28 each--above the $24-$26 range set by underwriter Credit Suisse First Boston Corp. The sale represented an 18% stake and gave the company a market value of about $1.86 billion.
CS First Boston raised the range from $16-to-$18 earlier in the day, the second hike this month. MP3.com will trade on Nasdaq under the symbol MPPP.
Though the tech-oriented Nasdaq composite index posted its fourth-biggest point loss ever on the day, several initial public offerings surged, led by Gadzoox Networks Inc., whose shares more than tripled.
The rally "says new issues are defying the market. Investors see a chance to get in on something new. They don't want to miss out again on the latest wave, which is infrastructure," said Steve Harmon of Internet.com, a tech-oriented Web site.
San Jose-based Gadzoox (ticker symbol: ZOOX), which makes products that enable companies to build storage area networks, benefited from the growing need to store data.
It raised $73.5 million with its IPO and closed up $53.81, or 256%, at $74.81 on Nasdaq, where it was the top percentage gainer. The offering was also led by CS First Boston.
"There is a lot of demand in this arena for networking infrastructure," said Paul Bard, an analyst at Renaissance Capital Corp.'s IPO Plus Aftermarket Fund.
Gadzoox was not alone in its sharp gains. Biotechnology firm Genentech Inc. (DNA) of South San Francisco saw its shares jump 31% to close at $127 on the New York Stock Exchange after parent company Roche Holding spun off 16% of the company.
Internet marketer Engage Technologies Inc. (ENGA) rose 173%, helped partially by its ties to Internet venture firm CMGI Inc. Shares in the Andover, Mass.-based company soared $26 to close at $41.
Other IPOs also climbed:
* Data and voice communications services provider Convergent Communications Inc. (CONV) rose 43% to close at $21.50, after the Englewood, Colo., company raised $126 million.
* Be Inc. (BEOS), a Linux-based Internet appliance operating system maker headquartered in Menlo Park, Calif., gained 34% to close at $8.06.
* Online communities service Talk City Inc. (TCTY) of Campbell, Calif., climbed 14% to $13.69.