Net2Phone jumps after IPO, bucking market
NEW YORK, July 29 (Reuters) - While U.S. stock markets took a beating, shares of Web telephony provider Net2Phone climbed 36 percent following their $15 a share initial public offering on Thursday, underscoring the continuing appeal of Web-related IPOs.
Hackensack, N.J.-based Net2Phone was last up $11 at $26 on Nasdaq with 14 million shares trading hands. The company raised $81 million in its IPO.
Net2Phone, a unit of IDT Corp. (Nasdaq:IDTC), provides Internet telephony services that allow users to make telephone calls over the Internet at low cost. The firm's software will be embedded exclusively into new versions of the browser of America Online Inc.'s (NYSE:AOL - news) Netscape Communications Corp.
IDT will own about 57 percent of the company's outstanding stock.
Managed by lead underwriter Hambrecht and Quist, Net2Phone priced above its increased, expected price range of $12 to $14, and the shares on offer were raised to 5.4 million from 5.1 million, on a day when the Dow Jones Industrial Average slid more than 200 points on worrisome economic data.
Analysts said the company was the leader in Web telephony and had the potential to change the landscape of how people make phone calls.
''Internet telephony is one of the hot industry sectors. It's a high demand area. We're sitting with a market share leader, albeit it's a small industry,'' said Irv DeGraw, research director at WorldFinanceNet.com.
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