| Tech Stock News and Analysis |
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| Friday, September 22, 2006 |
Shares of software makers CommVault Systems Inc. and DivX Inc. jumped in market debuts on Friday, continuing a recent uptick for initial public offerings in the technology sector.
After a difficult year for tech IPOs with ten delayed offerings, shares of DivX and CommVault gained in openings on Friday, after pricing at the top or above a forecast range.
"The bigger picture is that these deals are strong fundamentally," said David Menlow, president of IPOfinancial.com. "Market gyrations shouldn't turn sentiments toward these deals into any negative thinking."
CommVault shares opened up 10 percent at $16 and closed at $17 on the Nasdaq.
Shares of DivX opened up 22 percent at $19.50, climbing as high as $20.44, before closing at $18.70 on the Nasdaq.
Both companies trade at roughly 50 times expected 2006 earnings, but have strong revenue growth and high gross margins, which bodes well for sustained gains, said Francis Gaskins, an independent IPO analyst and president of IPO Desktop.
"What people are looking for is top-line revenue growth where the company's technology is being adopted," Gaskins said. "(DivX and CommVault) are in the spotlight now."
CommVault designs software that backs up, protects and recovers data and sells products under the QiNetix brand.
For the three months ended June 30, the Oceanport, New Jersey-based company earned $3.34 million on $33.5 million in total revenue.
The company's 11.1 million share offering raised $161 million on Thursday after pricing at $14.50, the top of range, and gave the company an initial market capitalization of almost $604 million.
Media software maker DivX roughly doubled revenue from technology licensing between the first half of 2005 and 2006.
The San Diego, California-based company's software was downloaded more than 50 million times over the last 12 months, according to financial statements submitted to the U.S. Securities and Exchange Commission.
The 9.1 million share offering raised $145.6 million on Thursday, pricing at $16 per share, above a forecast range, and gave the company an initial market capitalization of about $535 million. |
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