Ixia Shines Through

The IPO of the week was definitely Ixia
. The price range was $10-$12, but the IPO was offered at
$13. By Friday, the stock had climbed to $30-3/4, giving the company a $1.6
billion market cap.

The company develops sophisticated technologies to test next generation
telecom networks. The company is young, but that does not seem to be a
problem. In fact, by 1998, the company was profitable. For the first six
months of 2000, Ixia had $28.3 million in revenues and net profits of $1.8
million. In 1999, revenues were $8.2 million.

But, for the most part, the IPO market was a harsh place last week. Look at
the tracking stock of Alcatel, called Alcatel Optronics
. Offered at $71.95, the stock ended the day at $71.38.

This was the case despite the fact the company develops optical networking
components. Aren’t these IPOs supposed to soar? Well, obviously not.
Perhaps the valuation was too high. Oh, and there is the uncertainty of the
euro. And don’t forget that the performance of tracking stocks have
historically been spotty.

However, the company is growing nicely. In the first six months of 2000,
sales rose 142% to $135.5 million. Net profits were $21.2 million.

Although, the IPO did make history. It was the first tracking stock issued
as an American Depositary Receipt (ADR).

Finally, on Friday, Reuters announced that it was registering for an IPO of
its Instinet unit. Shares of Reuters
increased 6% to $113.44.

Instinet is definitely a strong company. In the past quarter, revenues
increased 46% to $276 million.

Although, no terms have been announced.