Sycamore Stock Jumps Fivefold in IPO

Sycamore Networks Inc. made a stunning debut Friday, soaring nearly fivefold from $38 to $184.75 in its initial public offering.

The 2-year-old company, which makes equipment that lets fiber-optic networks carrying Internet traffic operate faster, closed with a market value of $14.42 billion--the largest ever achieved by an Internet-related company in its first day of trading, according to CommScan.

Companies that assist in providing high-speed Internet access have been among the hottest offerings this year. Sycamore is the first company to go public that focuses on providing a way to increase the speed of fiber-optic networks.

“Sycamore could revolutionize the way optical networks are built,” said Tom Nolle of CIMI Corp., a Voorhees, N.J.-based consulting firm that specializes in telecommunications. “Its technology reduces the cost of building an optical network while increasing capacity at the same time.”

Sycamore’s 386% gain was the fourth-biggest first-day gain ever. The shares traded as high as $270.88.

The company raised $284.1 million in the offering, selling 7.475 million shares, a stake of 9.6%, at $38 each. The company plans to use about $5.2 million of the proceeds to pay off debt.