Spain's Terra Debuts on Nasdaq
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Terra Networks Wednesday became the first Spanish company to list on the Nasdaq, hitting the market with a bang after a tremendous debut on the Madrid exchange.
Terra (TRRA) opened at 51 after the IPO price was set at $13.41 per share, and jumped to 54-1/2 before falling to 41 in mid-morning trading. The company released 38 million shares, raising $502 million. Terra offered an additional 23.5 million shares to partners in Latin America and the US.
The company's shares fared well on the Madrid exchange as well, skyrocketing 130 percent at its highest trading. The stock had doubled in price the day before in pre-opening adjustments.
Telefónica S.A., Spain's leading telecom company, reportedly intends to retain its 70 percent stake in Terra. Telefónica's (TEF) stock was favorably influenced by the IPO, hitting a year high on both the Madrid exchange at 18.21 euros and New York Stock Exchange at $57.
In addition to its country-specific portals for Argentina, Colombia, Uruguay and Venezuela, the company plans to launch a service geared toward the U.S. Hispanic community by year's end. The company has already introduced access services in the US through its joint venture with IDT (IDTC). Wireless and cable access, ADSL, broadband and IP services are also in the works.
So far, the plan seems to have worked. Site traffic has grown from 13 million monthly visitors to 22 million in six months, while the number of paid subscribers jumped from 352,000 to 604,000 in the same time span.
Terra had previously warned investors that it does not expect to see profits for at least three years. Funds raised from the IPO will go towards expansion as the Spanish superpower contends with American counterparts such as Starmedia Inc. (STRM), Yahoo! Inc. (YHOO), and America Online Inc. (AOL) in a struggle for the Latin American market.