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New York, NY 10004
FOCUS-Quantum Effect shares surge after IPO
Reuters Story - February 01, 2000 20:52
Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly
prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the
content, or for any actions taken in reliance thereon.
(Updates to close, adds byline, analysts' quotes, details)
By Brian Kelleher
NEW YORK, Feb 1 (Reuters) - Microprocessor maker Quantum Effect Devices
Inc. shares caught analysts by surprise and surged Tuesday on the Nasdaq, closing
up over 250 percent to become the percent gain winner among initial public
offerings.
"(Quantum) kind of snuck up on us," said Irv DeGraw, research director at
WorldFinanceNet.com. "Revenues are growing rapidly and they've got gross
margins, (which means they) are disciplined enough to know how to make money."
Shares of Quantum closed up 40-1/2 to 56-1/2 after its 3 million share IPO, which
was priced at $16 per share through lead underwriter Morgan Stanley.
It closed ahead of two other debuts on the top percentage gainers list for the
Nasdaq, as IPOs Turnstone Systems Inc. and Sequenom Inc. closed up 234
percent and 204 percent, respectively.
The Santa Clara, Calif.-based company makes high- performance embedded
microprocessors used in networking and communications infrastructure equipment
and computer network equipment such as set-top boxes and cable modems.
Its customers include Cisco Systems Inc., Hewlett- Packard Co. and WebTV
Networks Inc.
"I'm surprised it didn't get more buzz (before the opening)," said Ken Fleming, an
analyst at Renaissance Capital's IPO Plus Aftermarket Fund.
Fleming said Quantum's "networking equipment (business) is a higher-margin
business (with) great partners like Cisco," which is not only a Quantum customer
but also holds a stake in the company along with investment firm Goldman Sachs
Group.
For the six months ended Dec. 31, the company had revenues of about $19.3
million and a gross profit of over $9 million. Net losses over the same period were
about $2.2 million.
Competitors include NEC Corp. and Toshiba Corp.
(( -- New York Equities Newsdesk (212) 859-1588)) |
