Shares of Diamond Rise 24% in Debut
Stockton-based nut grower and marketer Diamond Foods Inc. got a healthy reception on Wall Street on Thursday, as the company’s initial public stock offering zoomed nearly 24% in its first trading session.
Diamond sold 6 million shares late Wednesday at $17 each, above the range of $14 to $16 the company had projected.
The stock ended at $21.05, up $4.05, Thursday on Nasdaq. It traded as high as $21.85.
Demand for the stock reflected an improving environment for IPOs in general, analysts said.
The appetite for new stocks has “definitely picked up” from a lull earlier in the year, said Richard Peterson, chief market strategist at Thomson Financial in New York.
Another new issue that began trading Thursday was Adams Respiratory Therapeutics Inc. of Chester, N.J.
The company, which makes drugs for the treatment of respiratory disorders, sold nearly 8 million shares at $17 each. The stock jumped $8.75, or 52%, to $25.75 on Nasdaq.
Diamond, founded in 1912 as an agricultural cooperative, sells walnuts, almonds and many other nuts worldwide. Adjusted for its stock offering, the company would have earned $7 million last year on sales of $360 million.
Diamond, which sells products under the Diamond and Emerald labels, “has the No. 1 brand in the culinary and in-shell nuts segments and now hopes to become the main competitor to Planters in the fast-growing $2.6-billion snack nuts market,” said Ipohome.com, an IPO research firm, in a profile of the company this week.
However, the company’s heavy dependence on walnuts, which account for 70% of sales, puts Diamond at risk if a disaster were to hit that crop, Ipohome.com said.
Investor demand for IPOs will be tested again today, after two companies priced their deals late Thursday.
Maidenform Brands Inc., a maker of intimate apparel, sold 12.8 million shares at $17 each, above its expected range of $14 to $16 a share.
Hittite Microwave Corp., which makes integrated circuits for microwave applications, sold 4.5 million shares at $17 each. Its expected range also had been $14 to $16.
Maidenform, based in Bayonne, N.J., will begin trading today on the New York Stock Exchange under the ticker symbol MFB.
Hittite, based in Chelmsford, Mass., will begin trading on Nasdaq under the symbol HITT.
