In Trading Debut, 5 IPOs Rise Above Sell-Off on Nasdaq
Five initial public offerings bucked a selling frenzy that swamped the technology-heavy Nasdaq on Thursday, as new fiber-optic and biotech issues lured investors with their growth prospects.
The tech and health deals overcame a 3.7% tumble in the Nasdaq composite index as a spate of disappointing earnings shocked the market. Though several planned pricings have been postponed this week because of shaky market conditions, the IPOs that have gone forward have rallied, boding well for the slew of debuts expected today.
TyCom Ltd. (ticker symbol: TCM), a unit of manufacturing conglomerate Tyco International Ltd. (TYC), rose 14% on the New York Stock Exchange after a $2-billion IPO that will help fund the construction of an undersea fiber-optic network.
“I think this is going to be a potentially explosive market,” said Patrick Comack, senior equities analyst at Guzman & Co. “The data is already being driven by the Internet and high-tech communications and wireless, so there is going to be a tremendous amount of traffic going through these global fiber-optic networks.”
Meanwhile, shares of San Diego-based Applied Molecular Evolution (AMEV) surged more than 62% after the biotechnology company debuted on Nasdaq.
Stock of TyCom climbed to $36.50, up $4.50 from its sharply increased offering price. TyCom, which provides undersea fiber-optic network cable and services, closed with a market capitalization of about $18.4 billion. Tyco, its Bermuda-based parent, will retain an 88% stake.
Applied Molecular closed at $30.88, up $11.88 from its offering price. The company priced 4.65 million shares at $19, the top of its upwardly revised range, raising $88.4 million.
In other debuts:
* Shares of Rita Medical Systems Inc. (RITA) climbed 20% to $14.38 after a $12 pricing. Rita sold 3.6 million shares in the middle of its $11 to $13 range and raised $43.2 million. Mountain View, Calif.-based Rita produces medical equipment, including a device that uses heat to kill cancerous cells.
* Shares of Cambridge, Mass.-based Mainspring Communications Inc. (MSPR) rose 19% to $14.31, up $2.31 from its offering price. The Internet consulting company sold 4 million shares at $12 each, the top of the estimated range, raising $48 million.
* Shares of San Diego-based Discovery Partners International Inc. (DPII), a provider of drug-discovery tools to the pharmaceutical industry, closed at $19.75 on Nasdaq, up $1.75. The company priced 5 million shares at $18, above its estimated range of $15-$17, raising $90 million.
Meanwhile, 12 companies completed or planned IPO pricings Thursday night, led by Corvis Corp. (CORV), in one of the busiest days since 1997, although the Nasdaq rout scared three other companies off the calendar.
Last week, by contrast, just 11 IPOs were completed, raising $1.23 billion.
Columbia, Md.-based Corvis, which makes equipment for fiber-optic networks, raised $1.14 billion by selling 31.6 million shares at $36, above the expected range, in the largest IPO for a U.S. company that has not reported revenue, according to CommScan, whose database dates to 1990.
North Billerica, Mass.-based Avici Systems (AVCI), which makes data-traffic routers, raised $217 million by selling 7 million shares at $31, above the target range.
Three biotech companies completed deals: Arena Pharmaceuticals Inc. (ARNA) sold 6 million shares at $18, Genencor International Inc. (GCOR) sold 7 million shares at $18 and Illumina Inc. (ILMN) sold 6 million shares at $16.
All the stocks priced Thursday will begin trading today.
Deals from Infinite Technology Group Ltd., Tripath Technology Inc. and Intralinks Inc. were delayed Thursday.
