| Tech Stock News and Analysis |
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| Thursday, September 21, 2006 |
Riverbed shares rise 48 percent in debut
Shares of computer networking company Riverbed Technology Inc. rose as much as 48 percent in its market debut on Thursday, a day after pricing above a forecast range.
The shares opened up 47 percent at $14.30 before extending the gains to $14.40 in morning trading on the Nasdaq.
Riverbed's first day gains come in contrast to other technology IPOs so far this year. Due to investors' aversion to risk, 10 tech companies this year postponed or withdrew offerings, accounting for about 23 percent of the 44 IPO delays, according to Dealogic data.
The 8.8 million share offering raised $85.8 million Wednesday, after pricing at $9.75 compared with a $7 to $8.50 forecast.
The pricing gave the company an initial market capitalization of about $627 million.
The San Francisco, California-based company makes appliances that increase data transmission speeds across wide area networks (WANs) by five to 50 times, according to the filing with the U.S. Securities and Exchange Commission.
Riverbed lost $17.4 million on revenue of $22.9 million in 2005 after losing $9.8 million on revenue of $2.6 million in 2004, the filing said.
Other issues set to debut Thursday did not fare as well as Riverbed in their pricing on Wednesday. Prescription drug maker Warner Chilcott Holdings Company Ltd. and Home Diagnostics Inc. which makes supplies for diabetics, were priced below their forecasted range.
Underwriters led by Goldman, Sachs & Co. have the option to buy an additional 1.3 million Riverbed shares to cover overallotments, according to the SEC filing. |
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