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Sunrise dawns, up 169%
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July 13, 2000: 1:12 p.m. ET
Optical test gear maker nearly triples price; Titan does almost as well
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NEW YORK (CNNfn) - After stumbling out of the gates early this week, the new issues market finally found its stride Thursday as two debut stocks, Sunrise Telecom Inc. and Triton Network Systems Inc., surged more than 150 percent.
Sunrise, a maker of telecom network testing equipment, jumped 169 percent while Triton, a maker of broadband wireless equipment, climbed 156 percent - placing the two companies atop the Nasdaq Composite index's leadership board for the day.
The day's two other initial public offerings also produced strong debuts. Network Engines Inc., a maker of Web server appliances, climbed 71 percent, and I-Many Inc., a management systems provider, rose nearly 39 percent.
Analysts said the positive earnings results from Yahoo! (YHOO: Research, Estimates) Tuesday helped spur Thursday's strong IPO market.
"Investors were looking for direction and Yahoo was the catalyst to make them more optimistic," IPO Value Monitor analyst Steve Tuen said.
However, investors still are wary of new issues and talk of a rebound is still premature, Tuen said.
"It's like hot and cold," he said. "The last two days the IPOs did very poorly. Investors are still nervous and are trying to find the true value of all these companies."
The Sun also rises
At one point Thursday, Sunrise Telecom had more than tripled its offer price of $15 per share, before closing the day at 44-5/8, up 29-5/8
The San Jose, Calif.-based company raised $60 million after pricing 4 million shares through underwriters led by Chase H&Q. The company had boosted the range to $11-$13 from the originally planned $10-$12.
 Sunrise Telecom (SRTI: Research, Estimates) makes monitoring equipment that lets customers test services offered by digital subscriber lines, fiber optics, cable TV networks and signaling networks. The company has moved from focusing on DSL, high-speed Internet services offered over traditional copper telephone wires, to the more popular fiber optics, analysts said.
David Menlow, president of IPOfinancial.com, said Sunrise Telecom gained because of the need for testing equipment.
"Fiber optics is expanding and someone has to be there to take care of it," Menlow said. "Someone has to manage the day-to-day operations of the equipment."
Sunrise targets local exchange carriers such as Pacific Bell Telephone Co., Southwestern Bell Telephone Co., Ameritech Corp. (AIT: Research, Estimates), Nevada Bell and Southern New England Telephone as well as infrastructure suppliers and installers in North America, Latin America, Europe and the Asia/Pacific region.
Triton booms
Triton Network Systems followed a similar course as Sunrise, nearly tripling its offer price of $15 per share before settling it at 38-7/16, up 23-7/16 for the day.
The Orlando, Fla.-based Triton Network Systems (TNSI: Research, Estimates), which provides high-speed wireless equipment that lets communication service providers offer voice, data and video services to their customers, raised $82.5 million Wednesday when it priced 5.5 million shares through underwriters led by Credit Suisse First Boston. The deal range was hiked to $13 to $15 from the originally filed $10 to $12 a share.
 Sprint PCS recent announcement that it was rolling out its own fixed wireless products helped give Triton a boost, Tuen said.
"Triton Network sells the systems that these service providers will need," he said. "It's a good play on the broadband infrastructure build out of the Internet."
Two-year-old Triton offers two product lines: Invisible Fiber Internet products target Internet service providers, while Invisible Fiber SONET products focus on communications service providers.
Following the IPO, Bandel Carano, a general partner with Oak Investment Partners, will hold an 11.6 percent stake, entities affiliated with Oak Investment Partners will own 11.6 percent and IBM will have 8.1 percent.
Network Engines zooms
Network Engines Inc. (NENG: Research, Estimates) finished its first day up 12 to 29. The company raised $110.5 million Wednesday after pricing 6.5 million shares at $17 each, the top of the range, through underwriters led by Donaldson, Lufkin & Jenrette.
The Canton, Mass.-based company provides compact server appliances that let businesses offer information and applications over the Internet. The high-powered server appliances can be used on either Windows or the Linux operating system.
Even with such strong competitors as IBM, Dell and Compaq, investors still are bullish on Network Engines, positioning the company as a modern day "David and Goliath" success story, said Corey Ostman, co-chief executive of Alert-IPO.com.
"A lot of people still look toward a small start-up as having more potential than big companies," Ostman said. "Internet infrastructure is still a very viable area in the IPO market."
Network Engines relies on a small number of customers for its revenue. For the six months ended March 31, IBM accounted for 26 percent of revenue, while Microsoft's (WebTV) provided 18 percent and TellMe Networks accounted for 14 percent.
After the IPO, Ascent Venture Partners will hold a 20.4 percent stake, HarbourVest Partners VI-Direct Fund will own 15.1 percent, Egan-Managed Capital LP will have 8.7 percent and Canaan Equity Partners II LP will have 5.4 percent.
I-Many is enough
I-Many Inc., a provider of Web-based e-commerce management systems, also made its debut Thursday, climbing 3-15/32 to 12-15/32. I-Many raised $67.5 million after pricing 7.5 million shares at $9 each, the bottom of its range, through underwriters led by Robertson Stephens.
Portland, Me.-based I-Many Inc. (IMNY: Research, Estimates) targets healthcare suppliers and distributors of pharmaceutical products.
The company plans to use net proceeds for general corporate purposes including working capital, capital expenditures and possible acquisitions. 
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