|
Multilink IPO up 24%
|
 |
June 21, 2001: 1:02 p.m. ET
Chipmaker gains $2.19 to $11.19 on Nasdaq; first tech deal in month
|
NEW YORK (CNNfn) - Chip developer Multilink Technology Corp., the first technology-related IPO to open in a month, gained 24 percent Thursday.
Shares for Multilink (MLTC: Research, Estimates) climbed by $2.19 to $11.19 on the Nasdaq.
Technology related offerings have been few this year. Multilink, a chipmaker, is the first tech-oriented issue to open since Instinet Group Inc. (INET: up $0.95 to $17.70, Research, Estimates) made its debut on May 18 when it gained 22 percent. Multilink is also the ninth technology related IPO this year, according to CommScan, a New York-based investment banking firm.
More important, the chip developer is the first IPO this week to score gains in the aftermarket.
Hartford, Conn.-based Phoenix Cos. Inc. (PNX: up $0.77 to $17.53, Research, Estimates), a demutualized insurer, fell more than four percent Wednesday which followed the dismal performance of Princeton Review Inc. (REVU: up $0.48 to $8.01, Research, Estimates), which also dropped nearly 14 percent. Statoil ASA (STO: down $0.07 to $7.57, Research, Estimates), a Norwegian oil and gas company, barely maintained its $7.47 IPO price Monday.
"The deals are priced too high," said David Menlow, president of IPOfinancial.com. "For deals to crack like this, if there was perceived value these stocks they would not be falling apart the way they have."
The success of Multilink indicates that investors may be interested in tech-related offerings but the market still needs to float some smaller sized IPOs, in the three million-to-five million share range, to gain confidence, Menlow said.
"This is a small foundation step but one that is necessary," he said.
Multilink raised $72 million late Wednesday after selling priced 8 million shares at $9 each, within its $9-to-$10 price range, via Credit Suisse First Boston.
Somerset, N.J.-based Multilink develops high bandwidth semiconductors and related devices for companies such as Alcatel, Cisco, Nortel and JDS Uniphase.
The company has inked a deal with IBM to jointly develop chips. Under the deal, both companies can sell products to third parties. After the IPO, IBM (IBM: down $0.49 to $112.60, Research, Estimates) will hold a 1.5 percent stake, while TRW Inc. (TRW: down $0.19 to $41.00, Research, Estimates) will hold 17.37 percent. 
|
|
|
|
|
 |
|
