Good Reception for Cellphone Game Maker IPO

Jamdat Mobile Inc.’s initial public stock offering got a strong reception Tuesday, as the Los Angeles-based developer of video games for cellphones sold 5.55 million shares at $16 each.

The company had expected to sell 5.3 million shares at $13 to $15 a share.

Mobile phone gaming is one of the fastest-growing segments of the video game industry; wireless carriers are embracing games such as blackjack and baseball as a revenue source.

Jamdat distributes its games via wireless phone networks in 39 countries. Its customers pay a fee to their wireless carrier, which then pays Jamdat, after taking a cut.

Jamdat earned $1.16 million on sales of $15.5 million in the first half of this year, compared with a loss of $4.26 million on sales of $4.2 million in the first half of 2003.

Certain Jamdat shareholders, including Intel Capital Corp., Sun Microsystems Inc. and Sprint EWireless Inc., sold more than 1.7 million shares in the offering. Jamdat sold the balance, raising about $60 million before underwriting fees.

With 19.5 million shares outstanding after the IPO, Jamdat has a market capitalization of $312 million.

This summer, a number of Jamdat competitors -- including Sorrent, In-Fusio, Digital Chocolate and Mforma -- raised significant amounts of financing from venture capitalists.

Jamdat stock will begin trading today on Nasdaq under the symbol JMDT.