graphic
News
Cobalt IPO rockets
November 5, 1999: 1:50 p.m. ET

Server appliances developer's stock soars 618% in early trade
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Cobalt Networks stock took off for the sky Friday morning in its first day on the market, rising as much as 618 percent above its $22 initial public offering price in morning trade.
     By midday, shares in the server appliances developer had eased somewhat but still were up 484 percent at 128-1/2. Earlier, the stock had climbed as high as 158 on the Nasdaq on volume of over seven million shares.
     High demand for the offering was evidenced prior to the IPO pricing, when the company raised its expected price range to $20-$22 from $14-16.
     Through its lead underwriter Goldman Sachs, the Mountain View, Calif.-based company raised $110 million by offering 5 million shares, which represent an 18 percent stake in the firm.
     Cobalt produces network infrastructure devices known as server appliances, which use the free Linux operating system and are designed to deliver select network-based applications well.
     Its principal product lines, the Cobalt Qube and Cobalt RaQ, enable customers to perform Internet-related functions such as file serving, Web hosting and providing software applications over the Internet including e-mail and electronic commerce.
     The Linux tie is critical to the company's success as big hardware and software makers are expanding their ties to the open-source system, which won IBM's endorsement in February.
     "They've got all the magic words between appliances and Linux, but there is also some meat behind this. It's not just smoke and mirrors; it's a real business. We're seeing more and more of these companies moving away from ephemeral dot.com businesses and getting into real businesses," said Irv DeGraw, research director at WorldFinanceNet.com.
     "It's more than just networking. What they are doing is building Linux appliances, which has real cost-saving (potential) for Web site operators. They are looking to attack the market early and hard. That was the Netscape strategy and the Amazon.com strategy," DeGraw added.
     Cobalt's competitors include VA Linux, Dell Computer, Intel and Sun Microsystems. Chase Venture Capital is among Cobalt's investors.
     In 1998, the company reported a net loss of roughly $10.5 million on $3.5 million in revenue.
     Back to top
     -- from staff and wire reports

  RELATED SITES

Cobalt Networks


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.