Accelerated Networks Sizzles, Sparking Hope for IPO Revival
Accelerated Networks Inc., a Moorpark developer of high-speed telecommunications equipment, made a sizzling stock market debut Friday, with its shares more than tripling from their initial offering price of $15 to close at $47.88.
The company’s stock (ticker symbol: ACCL) rose as high as $52.50, with more than 14 million shares changing hands. It ended the day as the Nasdaq’s biggest percentage gainer.
The hot action in Accelerated’s initial public offering gave market watchers hope that the depressed IPO market may be coming back to life. Accelerated’s 219% first-day price gain is among the biggest of the year, although it ranks well below the gains that the top IPOs saw in the market’s heyday last year.
“Definitely a moonshot,” said Tom Taulli, a stock analyst with Internet.com. “A lot of people have been burned on IPOs, but I think investors are coming back. You’re not seeing huge gains, but sporadically you are, like today’s.”
The offering raised about $60 million for the 4-year-old company through the sale of 4 million shares underwritten by Credit Suisse First Boston, UBS Warburg and U.S. Bancorp Piper Jaffray.
Accelerated Networks has recorded only $8.5 million in revenue in its history, and its net losses, totaling $22 million last year, have been mounting at a quickening pace. It began shipping its first products last year.
But Accelerated’s position as a maker of advanced telecommunications equipment--its devices allow voice and data traffic to be combined over a single high-speed connection--has put the company in the middle of the movement to merge computer and telephone technology.
Traditionally, phone service has been provided by telephone companies and Internet service has been provided by specialized Internet service providers.
Suresh Nihalani, Accelerated’s chief executive, and Kiran Munj, now the company’s vice president of hardware engineering, founded Accelerated in 1996 with the idea that combining both services over the same high-speed connection would help simplify corporate telecommunications systems and lower their costs.
Accelerated targeted the new generation of bundled telecommunications service providers, such as Denver-based First World Communications, as their primary customers.
Friday’s stock offering turned Nihalani and Munj into the region’s latest multimillionaires.
Nihalani, with 6.2 million shares, now has holdings in Accelerated worth nearly $300 million. Munj’s stake in the company is now worth $71 million.
Nihalani and Munj declined to comment on their company’s offering Friday, citing the usual blackout the Securities and Exchange Commission places on company comments before and after an IPO.
Many companies that had planned IPOs for May and June withdrew them, as investors have become far more discriminating in the wake of the tech stock sector’s spring plunge.
The issues that have come to market have mostly scored modest first-day gains, and many have pulled back after those initial pops.
China Unicom (CHU), a major provider of mobile phone services in China, came to market at $19.99 a share Wednesday and rose as high as $24.63. But the price dropped back to $20.50 on Friday.
Still, some of the hottest recent issues have been telecom-related. New Focus (NUFO), a maker of fiber optic components, went public at $20 a share in May, and closed Friday at $97.50.
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How Recent IPOs Have Fared
Here’s a look at performance of some recent initial public offerings, measured from their IPO prices to Friday’s closing prices:
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Ticker IPO IPO Fri. Pctg. Stock symbol date price close chng. Charles River CRL 6/23 $16.00 $22.00 +38% Manufac. Svcs. MSV 6/22 16.00 21.25 +33 Qualstar QBAK 6/22 7.00 7.72 +10 ClickSoftware CKSW 6/22 7.00 7.38 +5 Osca OSCA 6/22 15.50 17.00 +10 China Unicom CHU 6/21 19.99 20.50 +3 Cepheid CPHD 6/21 6.00 9.25 +54 Handspring HAND 6/20 20.00 22.88 +14 Dendreon DNDN 6/16 10.00 13.75 +38 EChapman ECMN 6/15 13.00 7.38 --43
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Sources: Bloomberg News, Reuters
