(Updates throughout with closing stock prices, additional information and Internet Brands.)
By Lynn Cowan and Brett Philbin
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Deals from industrial crystal maker Rubicon Technology Inc. (NASDAQ-NMS:RBCN) (RBCN) and computer storage company 3Par Inc. (PAR) led five initial public offerings Friday.
Rubicon Technology gained 25% and 3Par gained 13%, respectively, on their first day of trading.
Meanwhile, El Paso Pipeline Partners LP (NYSE:EPB) (EPB) posted modest gains, as Chimera Investment Corp. (NYSE:CIM) (CIM) declined and Web-site operator Internet Brands Inc. (NASDAQ-NMS:INET) ( INET) closed flat. Friday capped an active week for IPOs as five rose, three fell, and three closed flat.
The IPOs' performances came on a seesaw day in which the broader stock market closed higher on late buying after swaying back and forth on positive news from big-name energy and technology companies and lingering concerns about the economy.
The best performance of the day came from Rubicon Technology. The stock closed at $17.50 a share, up 25% from its IPO price of $14 a share on the Nasdaq, at the high end of the expected $12 to $14 range, set by underwriter UBS AG (NYSE:UBS) (UBS). The stock opened flat, but surged higher in early trading.
Scott Sweet, managing director at Tampa research firm IPOBoutique.com, said the stock's swift climb after a flat open may be an indication of a trading strategy by its underwriters.
"A lot of times, underwriters will purposely open a hot deal flat to get all of the sellers out, i.e., to get all of the cheap stock they can, when in fact they purposely know the stock is going higher," Sweet said.
Based in Franklin Park., Ill., Rubicon makes monocrystalline sapphire and other monocrystalline products for electronics materials like light-emitting diodes, or LEDs, and optoelectronics. It produces its own sapphire, rather than mining it, and processes it into wafers that are used in everything from diodes for electronics to military and aerospace applications.
Of the total shares sold, 1.2 million came from private investors in the company, including venture-capitalist Gazelle TechVentures, so those proceeds won't benefit Rubicon.
3Par Has Solid Debut
Another strong showing came from 3Par. It closed at $15.75 a share on the NYSE Arca, up 13% from its IPO price of $14. It sold 7.5 million shares at a price above its expected $11 to $13 range, which was set by underwriters Goldman Sachs Group Inc. (NYSE:GS) (GS) and Credit Suisse Group (NYSE:CS) (CS).
Headquartered in Fremont, Calif., 3Par makes storage systems geared toward utility computing, an emerging technology that helps companies expand their storage easily, and improve the efficiency of servers and data storage. Utility computing uses virtualization, which is considered the forefront of server and storage technology, allowing its users to dedicate less space and staff time to data management.
Among its 200 customers are the U.S. Census Bureau, News Corp.'s (NYSE:NWS) (NWS) MySpace.com and Dow Jones & Co. (NYSE:DJ) (DJ), the owner of this and other wire services. News Corp. has signed an agreement to acquire Dow Jones. The deal is expected to close in the fourth quarter.
3Par was formed in May 1999 and first began shipping its products in 2002, and its revenue has grown rapidly since then. In the first half of 2007, it reported revenue of $51.8 million, up 52% from the same period in 2006. The company has never been profitable, and its net loss widened in the first half of 2007 to $7 million from $3.7 million a year ago.
The last virtualization-related company to launch an IPO was software company VMware Inc. (NYSE:VMW) (VMW), which gained 76% on its first day of trading in August and closed up 194% from its IPO price of $29 a share. However, VMware, which introduced its first product eight years ago, was profitable when it went public, whereas 3Par is not. VMware was also the market leader in its space, while 3Par faces some hefty competitors in the storage arena. Among the giants 3Par competes against are VMware's parent, EMC Corp. (NYSE:EMC) (EMC); International Business Machines Corp. (NYSE:IBM) ( IBM (NYSE:IBM) ); and Network Appliance Inc. (NASDAQ-NMS:NTAP) (NTAP).
El Paso Pipeline Posts Modest Gains
El Paso Pipeline Partners rose 4.5% on its first day of trading Friday.
The company's stock closed at $20.90 a share on the New York Stock Exchange, up from its IPO price of $20, at the midpoint of its expected range of $19 to $ 21.
Based in Houston, El Paso Pipeline was formed by energy company El Paso Corp. (NYSE:EP) (EP) to own natural-gas pipelines and other storage facilities. The new company initially will own an interstate pipeline business located primarily in Wyoming and Colorado, as well as a 10% general partner interest in two other pipelines in the Rocky Mountains and the Southeast. Parent El Paso Corp. owns the remaining 90% general partner interest in each of those two pipelines. El Paso Pipeline plans to construct and acquire other energy infrastructure assets.
El Paso Pipeline's IPO was managed by Lehman Brothers Holdings Inc. (NYSE:LEH) (LEH), Citigroup Inc. (NYSE:C) (C), Goldman Sachs and UBS.
Internet Brands Closes Flat
After pricing midday Friday at $8 a share, Web-site operator Internet Brands Inc.'s (NASDAQ-NMS:INET) (INET) initial public offering closed flat on the Nasdaq. A total of 6 million Class A shares were sold. The company earlier Friday reduced the size of the offering from 9.6 million shares and slashed the estimated price from an earlier range of $10 to $12, which was set by book-running manager Thomas Weisel Partners Group Inc. (NASDAQ-NMS:TWPG) (TWPG).
Based in El Segundo, Calif., Internet Brands operates 45 Web sites ranging from automotive e-commerce site CarsDirect.com to ApartmentRatings.com. The Web sites generate advertising revenue, which accounts for nearly three-quarters of its total revenue so far in 2007. The company also licenses its content and Internet-technology products and services to businesses and individual Web-site owners, generating licensing and service fees.
Chimera Investment Fails To Wow Investors
On the losing end of IPOs on Friday was a company formed to invest in mortgages and mortgage-backed securities.
Chimera Investment's stock closed at $14.90, down 10 cents from its IPO price of $15 on the New York Stock Exchange. It sold 33.3 million shares.
Based in New York City, Chimera is structured as a real estate investment trust that is externally managed and advised by Fixed Income Discount Advisory Co., a subsidiary of another REIT, Annaly Capital Management Inc. (NYSE:NLY) (NLY).
Annaly formed Chimera in June. Concurrent with the IPO, Annaly purchased 9.8% of Chimera's outstanding shares.
Chimera's offering was managed by underwriters Merrill Lynch & Co. (NYSE:MER) (MER), Credit Suisse and Deutsche Bank AG (NYSE:DB) (DB).
-By Lynn Cowan, Dow Jones Newswires; 301-270-0323; lynn.cowan@dowjones.com
-By Brett Philbin, Dow Jones Newswires; 201-938-5393, brett.philbin@ dowjones.com
(END) Dow Jones Newswires 11-16-07 1737 Copyright (c) 2007 Dow Jones & Company, Inc.
