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Tut Systems' towering IPO
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January 29, 1999: 1:15 p.m. ET
High-speed networking company jumps 236% in first day of trading
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NEW YORK (CNNfn) - Shares of Tut Systems Inc. soared 236 percent midday Friday with investors flocking to yet another Internet-related initial public offering.
Tut (TUTS), a Pleasant Hill, Calif.-based provider of high-speed data networking products, saw its stock rally to 60-1/2 in midday trade from an opening price of 18. Tut shares climbed as high as 63-1/2 earlier in the day.
Earlier this week, Tut raised its offering price to the $16- to $18-a-share range from its original price of $14- to $16 a share.
Tut makes networking equipment for one of the hottest technology segments: digital subscriber line (DSL) Internet access. Consumer demand for high-speed Internet access is rising, and several companies, such as America Online Inc. (AOL) and @Home Corp. (ATHM), have taken steps recently to boost their presence in the market.
Investors have recently been flocking to companies who provide backbone equipment for Internet services, such as Cisco Systems Inc. (CSCO) and Xilinx Inc. (XLNX).
Tut also makes home networking equipment, an emerging market that is rapidly gaining the attention of such companies as Microsoft Corp. (MSFT), Intel Corp. (INTC) and Sun Microsystems Inc. (SUNW).
In its Securities and Exchange Commission filing, Tut Systems said it planned to use $2.5 million of the proceed raised from the IPO to purchase "certain intellectual property" from a third party, though it did not give specific details.
The company reported a 1998 pro-forma net loss of $1.63 a share in its filing. Its revenue, however, increased to $10.6 million from $6.2 million in 1997.
Tut said it is depending on the rapid deployment of high-speed data networks to boost product revenue.
Tut Systems high-flying first day of trading marks the second successful IPO of the year, following Marketwatch.com (MKTW), which jumped 474 percent on its first day of trading earlier this month. 
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Tut Systems
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