NEW YORK (CNN/Money) -
JetBlue Airways Corp. jumped 67 percent in its first day of trading Friday, making it the hottest initial public offering in nearly a year, while biotechnology company Ribapharm inched up in its debut.
Shares of JetBlue (JBLU: up $18.00 to $45.00, Research, Estimates) closed at $45 on Nasdaq, up $18 from their $27 offer price. Friday's other IPO, Ribapharm Inc. (RNA: up $0.80 to $10.80, Research, Estimates), finished at $10.80 on the New York Stock Exchange, for an 8 cent gain.
"JetBlue is an absolute gift for IPO buyers," said analyst Ben Holmes of Morningnotes.com, which tracks new issues. "It's the hottest deal this year.
The JetBlue offering easily beat out 2002's other blockbuster deal from PayPal Inc. (PYPL: Research, Estimates), which rose 54 percent in February. In fact, the discount airline posted the strongest first day gain since Simplex Solutions (SPLX: Research, Estimates) went public last May, gaining 77 percent, according to data from Dealogic.
JetBlue's gains hark back to the IPO gold rush of 1999, when deals often would open with a big pop. JetBlue's success also will give ExpressJet Holdings Inc., which goes public next week, a boost, Holmes said.
JetBlue raised $158 million late Thursday when it sold 5.87 million shares at $27 each, above its expected price range, via lead underwriters Morgan Stanley and Merrill Lynch. JetBlue had expected to sell 5.5 million shares at $25 to $26 each, up from its previous $22 to $24 range.
The low-fare airline began operating in February 2000 and is now profitable, having modeled itself on rival Southwest Airlines Co., which also makes money. JetBlue reported $26.8 million in operating income on $320.4 million in revenue for the year ended Dec. 31, compared with a $21.2 million operating loss on $104.6 million in revenue the year before. JetBlue offers 108 daily flights serving 18 cities across the United States.
But shares of Southwest (LUV: up $0.92 to $19.26, Research, Estimates) are trading much lower than JetBlue's $40 range.
"Southwest is such an established business and such a close comparison," Holmes said. "But it would be surprising if JetBlue held onto its premium."
A biotech offering
Separately, Ribapharm, which researches antiviral and anticancer drugs, went public on the Big Board. Ribapharm, a spinoff of ICN Pharmaceuticals, came in below expectations when it raised $260 million early Friday. The company sold 26 million shares at $10 each, down from its initially expected range of $13 to $15, via UBS Warburg.
Ribapharm's product ribavirin is an antiviral drug that Schering-Plough markets to treat hepatitis C in the United States, the European Union and Japan.