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WJ Comm. up 102%
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August 18, 2000: 5:40 p.m. ET
Peco gains 53%; Integrated Telecom up 38%; Changepoint pulls its IPO
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NEW YORK (CNNfn) - WJ Communications Inc., a provider of radio frequency products, led a pack of four new market issues Friday, surging 102 percent.
Communication equipment maker Peco II Inc. rose 53 percent and Integrated Telecom Express Inc., which makes chips and software products, gained 38 percent. Viasource Communications Inc. managed to stay above water, trading flat.
The IPO market has struggled this week, with only seven deals opening for trade. On Thursday, Avistar Communications Corp. fell 22 percent in its debut, while two IPOs on Wednesday produced mixed results.
"It's been a crazy week," said Ben Holmes, president of ipoPros.com. "Everything that was supposed to work flopped."
 WJ Communications more than doubled its offer price, gained 16-1/4 to 32-1/4 after raising $86.4 million on Thursday. The company, pegged as the week's strongest deal by analysts, sold 5.4 million shares at $16 each, through underwriters led by Chase H&Q.
Instead of WJ Communications, Peco should have emerged as the week's strongest deal, Holmes said. Palo Alto, Calif.-based WJ Communications is a financial mess, with $33.9 million in operating losses and sales of $44.7 million, while Peco has better financials.
"WJ is fiscally no match for Peco. Peco should've been huge," he said.
Cisco has expressed interest in taking a stake in WJ Communications (WJCI: Research, Estimates) after its IPO, which could have caused the deal's strong first day, Holmes said.
WJ develops radio frequency products that speed the transmission of voice, video and data traffic along communication networks. Customers include Nortel Networks Corp. (NTL: Research, Estimates) and Lucent Technologies (LU: Research, Estimates).
WJ Communications relies on a very small number of customers to generate revenues. Nortel and Lucent together generated about 69 percent of WJ's sales for the six months ended June 30. Other clients include Cisco Systems (CSCO: Research, Estimates), Nokia Corp. (NOK: Research, Estimates), and Samsung.
Communications equipment
Peco II gained 8 to 23 after raising $75 million on Thursday.
Peco II Inc. priced 5 million shares at $15 each via underwriters led by Robertson Stephens. The company had planned on selling 5 million shares at $14-to-$16 each.
Galion, Ohio-based Peco II (PIII: Research, Estimates) makes communication equipment, such as power systems and power distribution equipment, for the communications industry. Customers include Verizon Communications (VZ: Research, Estimates), Lucent Technologies (LU: Research, Estimates), and Sprint Corp. (FON: Research, Estimates).
Peco had $74.2 million in sales on operational losses of $9.2 million for the six months ended June 30.
Quick telephone lines
Integrated Telecom Express rose 6-7/8 to 24-7/8. Integrated Telecom Express, which priced its shares at the midpoint of its expected range, sold 5.6 million shares at $18 each via underwriters led by Lehman Brothers. The company had planned on selling 5.6 million shares at $17-to-$19 each.
The Santa Clara, Calif.-based Integrated Telecom Express (ITXI: Research, Estimates) makes ADSL circuits and software products that improve the performance of high-speed digital subscriber line equipment. The company's ADSL technology, a form of digital subscriber lines (DSL), converts existing copper telephone lines into instant high-speed links for Internet access and multimedia access.
Integrated competes against Lucent Technologies and Texas Instruments (TXN: Research, Estimates). Customers include Nokia Corp. (NOK: Research, Estimates).
After the IPO, United Microelectronics Corp. will hold a 16.95 percent stake while Intel Corp. (INTC: Research, Estimates) will have 5.10 percent.
Barely afloat
Viasource Communications Inc. traded unchanged at 8.
Viasource Communications raised $40 million after selling 5 million shares at $8 each, the bottom of its reduced range, via Donaldson Lufkin & Jenrette. Viasource slashed its deal to 5 million at $8-to-$10 from its originally planned 11 million shares at $14-to-$16.
Fort Lauderdale, Fla.-based Viasource Communications (VVVV: Research, Estimates) provides services that connect the networks of broadband service providers on "the critical last mile" to residential customers and end users. Viasource offers installation, integration, fulfillment and long-term maintenance services to clients such as MediaOne Group Inc. (XVF: Research, Estimates) and Qwest Communications International Inc. (Q: Research, Estimates).
Changepoint Corp. withdrew its planned IPO Friday, citing poor market conditions, underwriters on the deal said. The company had planned on offering 5 million shares at $6-to-$8 each, down from the originally planned $8-to-$10 a share.
Changepoint Corp. offers Internet software and an online exchange designed to manage information technology services. 
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