Shares of Infinera Corp. jumped 52% to $19.71 in their first day of trading on the Nasdaq. Infinera's IPO was priced at $13/share ($182m total on 14m shares), above the expected $10 - $12 range set by a group of underwriters. It opened at $16 and gained as much as 63% to $21.24 intra-day. Bloomberg reports an additional 2.1 million shares may go to underwriters, raising the offering to as much as $209.3 million. The publisher of IPO research and tracking company Morningnotes.com says "[s]tocks focusing on telecommunications equipment, network systems and network subsystems have been the darlings of the technology sector this year." Infinera makes photonic chips using indium phosphide (instead of the slower industry standard silicon) for optical networking gear. Infinera's sales surged nearly 17-fold in Q1 to $49.2m, but two companies, Level 3 Comm. and Broadwing, accounted for 75% of sales in '06. Infinera is not profitable, having posted a $19.8m loss in Q1 and an $89.9m loss in '06. It has a market cap of $1.64b.
Sources: Bloomberg, MarketWatch
Commentary: This Week's IPOs Part I: Einstein Noah Restaurant Group, FBR Capital Markets Corp., Infinera Corp. • Why I'm Relieved by the Infinera S-1 • Infinera S-1: Cost of Goods Sold is Higher Than Revenue • The Effect of Internet Video: Market or Investor Discontinuity?
Stocks/ETFs to watch: Infinera Corp. (INFN). Competitors: Alcatel-Lucent (ALU), Cisco Systems, Inc. (CSCO), Ciena Corp. (CIEN), PMC-Sierra (PMCS)
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