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InterVideo IPO Is Another Strong DVD-Firm Debut

From Dow Jones/Associated Press

Shares of InterVideo Inc. made a strong debut Thursday, helped by the recent success of another DVD-related initial public offering.

Shares of the Fremont, Calif.-based company, which makes DVD software, ended the first day of trading at $18.69 on Nasdaq, up $4.69, or 34%, from the IPO price of $14.

The performance of InterVideo comes a week after Agoura Hills-based Digital Theater Systems Inc. -- which makes digital sound systems used in theaters and DVDs -- rose 47% in its market debut.

Like DTS, InterVideo saw strong prepricing demand for its shares. It originally planned to sell just 2.3 million shares, but an extra 500,000 were tacked on this week. In addition, the offering price was above expectations of $11 to $13 a share.

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The success of DTS last week almost certainly contributed to the demand for InterVideo shares, said David Menlow, president of IPOfinancial.com.

But InterVideo also gained because it fit into the category of what IPO investors have been favoring of late, he said: growing yet profitable companies, preferably in the technology sector.

“This isn’t like the old days,” Menlow said. “Investors want to see profits. They want reality over perception.”

InterVideo, which makes the WinDVD software installed in millions of home computers, had its first profitable year in 2002. In the first quarter it reported revenue of $13.4 million for net income of $2.7 million. It trades under the ticker symbol IVII.

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InterVideo’s debut is the latest in a string of strong openings for IPOs this month, as the new-issues market continues to recover.

Two more IPOs are expected next week. Integrated Alarm Services Group Inc. hopes to raise $220 million, and wireless-communications company IPass Inc. plans to raise $70 million.


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