PALO ALTO, Calif. (Reuters) - Shares of Tut Systems Inc., a maker of products that speed access to
the Internet over copper telephone lines, more than tripled in their first day of trading as investors
clamored for another piece of Internet mania.
The stock surged $38.38 to $56.38 in trading of 7.59 million shares, making it the 13th most actively traded issue on the
Nasdaq and the largest percentage gainer in U.S. markets. The stock, in a clear sign of strong investor demand, opened at
$49.63, nearly triple the IPO price of $18.
Buoyed by a resurgent market for initial public offerings, Tut also soared because, analysts said, of its close ties to the Internet.
Tut's sells its wares to Internet service providers, universities and businesses.
Pleasant Hill, Calif.-based Tut raised $45 million in its IPO by selling 2.5 million shares, which were priced at the top of the
expected range of $16 to $18. That range was increased earlier this week from $14 to $16 in a sign of strong investor demand.
''They are in a sweet spot of telecom,'' said Gail Bronson of market research firm IPO Monitor, adding that the company's
efforts in DSL, or digital subscriber line technology, are meeting with success. DSL provides lightning-fast access to the Internet
over standard copper telephone lines.
Based on the company's 11 million shares outstanding, it ended the day with a market value of about $620 million.
Not bad for a company that had a loss of $13.7 million in 1998 on revenue of $10.6 million. It is also targeting the home
networking market, a now nascent industry that is forecast to surge. Market research firm Yankee Group forecasts there will
be about 5 million new home networks by 2000.
Tut's 1998 loss widened from the $9.2 million it lost in 1997 on revenue of $6.2 million.
Also boosting interest in the Tut's IPO was backing from heavyweights such as Microsoft Corp (Nasdaq:MSFT - news) .,
which owns a 9.9 percent stake in Tut and an alliance with Intel Corp (Nasdaq:INTC - news) ., the world's largest maker of
computer chips.
Kevin Hause, an analyst at International Data Corp., said earlier this week that Tut will also benefit from the emergence of
home networks and continued acceptance and roll-out of DSL technology and services.
''We definitely believe that phone line-based networking has the most momentum today and it will continue in the foreseeable
future,'' Hause told Reuters.
Tut's offering follows another hot issue from Covad Communications Group Inc. of Santa Clara, Calif. It also provides
high-speed Internet access over regular telephone lines and shares of that company more than doubled in their first day of
trading a week ago.
Tut will use proceeds from the offering for general corporate purposes including research and development. Tut trades under
the symbol ''TUTS'' on the Nasdaq stock market.
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