RealTime IT News

DSL and Biotech

Over the past few years, there has been a spate of DSL (digital subscriber line) IPOs. Despite the fact there is a major shift towards broadband, the DSL market has been tough lately. True, the technology uses existing copper wire infrastructure. But there are problems. It is not completely reliable, especially at long distance. Other problems include peak traffic degradation and cross talk.

In light of this, the Elastic Networks IPO looked iffy. Although, the company is not a pure DSL provider; rather it uses advanced Ethernet solutions. The result? Apparently, the technology cures the many problems with traditional DSL. To add credibility, the company is a unit of Nortel Networks.

Unfortunately, IPO investors did not seem convinced. The offering price was $13, as the company raised $85 million. On its first day of trading, the stock ended up a mere 7%.

Actually, the company looks like a good prospect at these levels, though. Its patented technology appears to be strong and the backing of Nortel should lead to strong revenue growth over the long-term.

Another early stage IPO was Genomica . The company is a developer of bioinformatics technologies, which helps to make sense of the billions and billions of DNA sequences from the human genome. The company's software suite is comprehensive and is the result of 15 years of research. So far, the company has been able to attract big customers such as Glaxo Wellcome, Warner Lambert, the National Cancer Institute, the National Institute of Health, and Orchid Biosciences.

But the IPO was not spectacular. On its first day of trading, the stock was up 21% (although, the company did raise $122 million). Then again, the company is in the incipient stage and will take time to see tangible results.

You can see a more in-depth analysis in a prior IPO Tracker column.