Batch of New Wireless IPOs Set for Takeoff
Wireless IPOs could be highfliers this week and next, with Nextel Partners Inc. (ticker symbol: NXTP) starting trading today on Nasdaq and Palm Inc. (PALM), maker of the Palm Pilot organizers, expected to be priced as early as Monday.
Kirkland, Wash.-based Nextel raised $470 million Tuesday by selling 23.5 million shares at $20 each, $2 above the expected range set by underwriter Goldman, Sachs & Co.
Nextel Partners, an affiliate of Nextel Communications, provides digital wireless communications services in mid-sized and smaller markets throughout the U.S. The company holds broadband wireless licenses that cover 40 million people in 46 markets.
Nextel and Palm are entering a market still happy to pay up for new tech stocks. Through last week, IPOs this year gained an average of 101% in their first trading day, versus 68% for 1999’s debuts.
Other closely watched IPOs on tap this week include Carrier1 (CONE), a Zurich-based provider of voice and data services to telecommunications companies, which plans to raise $319 million; and Florida-based chip maker Intersil (ISIL), which hopes to raise $400 million.
Jeff Hirschkorn, senior analyst with IPO.com, said those deals, like Nextel, “are going to be blockbusters.”
Analysts say demand for wireless products could explode as users find they can carry the Internet in their pocket with hand-held devices such as the Palm Pilot.
“Wireless isn’t like putting fiber-optic lines in the ground,” said Mark Lowenstein, an analyst at the Yankee Group. “The company can always improve coverage and add capacity--there’s no such thing as a completely built-out wireless system. Internet service is the next big thing in wireless.”
Though the Barclays index of wireless stocks has backed off a bit from its recent peak, the sector has been rewarding investors with strong IPOs. TeleCorp PCS (TLCP) was priced in November at $20 and closed Tuesday at $42. Airgate PCS (PCSA) went public last fall at $17 and has risen to $72.88.
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Can Wireless Regain Its ‘Mo’?
Many wireless communications stocks have stalled in recent weeks after rocketing from September through mid-January. The initial public offering of Nextel Partners, which begins trading today, may be a key test of whether wireless shares in general can regain their momentum. Weekly closes and latest for the Barclays index of 27 major wireless shares, including Sprint PCS, Vodafone AirTouch and
Clearnet Communications:Break in scale
Tuesday: 602.10Source: Bloomberg News
