NEW YORK (CNN/Money) -
Shares of teen clothing retailer Aeropostale soared on their first trading, a day after the company raised $225 million with their initial public offering.
Aeropostale (ARO: up $7.60 to $25.60, Research, Estimates) rose more than 40 percent on the New York Stock Exchange in morning trade. The company priced 12.5 million shares Wednesday evening at $18 per share, above its expected range, through lead underwriters Merrill Lynch and Bear Stearns.
But the day's other IPO, Verint Systems (VRNT: down $1.40 to $14.60, Research, Estimates), did not fair as well as its shares fell below the company's initial offer price.
John Fitzgibbon, editor of IPO Desktop, said Aeropostale has everything an IPO needs nowadays: a fast-growing business, profits, a recognizable brand name, and a stock traded on the New York Stock Exchange.
"If you live on the East Coast and have kids 11-to-20 (years old), you've heard of them," Fitzgibbon said. "And there's not a lot else for the IPO market to feast on."
"Hey, Krispy Kreme was just a doughnut," he said, referring to one of the most successful IPOs of the last few years.
Aeropostale operates 278 stores in 33 states and the District of Columbia.
The company had revenue of nearly $305 million in 2001 and a profit of more than $11 million.
The Aeropostale brand was created Macy's department store and was sold to Aeropostale management and Bear Stearns Merchant Banking in 1998. The company plans to use proceeds from the IPO to buy out Bear Stearns' interest and also for general corporate purposes.
Verint shares fell nearly 10 percent on the Nasdaq.
Verint provides software for communications interception, digital video security, and surveillance, raised $72 million with its IPO through lead underwriters Lehman Bros.
"Here's a Nasdaq company that was priced low in the technology area and is money-losing," Fitzgibbon said. "There's your contrast (to Aeropostale)."
On Wednesday evening the company sold 4.5 million shares at $16 per share, the bottom of its expected range.
Verint had sales of more than $131 million in 2002 and lost nearly $5 million.
"Although (Verint's) revenues are growing sharply, in touchy stock markets profits count," Fitzgibbon said.
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