RealTime IT News

Off to a Great Start

To paraphrase the old episodes of Superman, "Look! Up, up in the sky... it's OmniSky !" While the IPO was not faster than a speeding bullet, it nonetheless had a strong performance.

Hey, then again, the company is a new-fangled wireless company. The IPO was priced at $12, which was at the top end of its $10-$12 range. CS First Boston was the lead underwriter.

In all, the company raised $109.2 million. And it will need the cash. In the first six months of 2000, the company had revenues of $2.1 million and losses of $39.8 million.

But this was no problem, as the company's stock surged to $17.64 on its first day of trading.

Essentially, the company makes it easier for handheld devices to access the Net. Currently, the company is focused on the Palm, but there are plans to extend the product line, such as for the Handspring as well as HP devices.

OmniSky has impressive backing. For example, 3Com owns 26.3 percent of OmniSky, Aether Systems has a 30 percent stake and News Corp controls 12 percent. What's more, the founders of OmniSky were top executives at Palm and Infoseek.

However, there is definite risk with the company. Perhaps the most critical is the pricing model. OmniSky offers unlimited use, yet must pay escalating fees to major carriers, such as AT&T and Verizon. If OmniSky does not predict its usage accurately, the results could be harsh.

But the stellar IPO was INRANGE Technologies . Originally, the price range was $12-$14. Then, it was boosted to $14-$16. The lead underwriter was Salomon Smith Barney.

Priced at $16 per share, the stock ended its first day of trading at $46.25. But, the performance was not surprising. You see, the company develops switching technologies for the fibre channel market.

The company's technology is impressive and in high-demand. Customers include American Express, Cisco and Lockheed. What's more, the company is profitable, with net income of $7.7 million for the fist six months of 2000. During this time, revenues were $98 million. For all of 1999, the company had revenues of $102 million and profits of $6 million.