From Reuters:
biz.yahoo.com
Monday January 31, 4:52 pm Eastern Time
Turnstone's IPO should ride on its hot technology
By Denise Duclaux
NEW YORK, Jan 31 (Reuters) - Turnstone Systems Inc. should meet solid demand when it makes its Wall Street debut as investors home in on its technology that allows local telephone companies to provide high-speed services over existing telephone lines.
``It looks like a solid company and it's in a good market,' said Corey Ostman, chief technology officer at www.alert-ipo.com.
The Mountain View, Calif.-based company is offering three million shares in a deal that could generate about $75 million that will be used for general corporate purposes. On Friday, Turnstone had upped its expected range to $23 to $25 per share from $15 to $17.
``Turnstone has increased their price sharply, which is a dead giveaway of strong demand,' said John Fitzgibbon of RedHerring.com.
Turnstone, which is working with underwriters Goldman Sachs, Dain Rauscher Wessels and Robertson Stephens, is offering a stake of roughly 10 percent to the public. The company, which has applied to trade under the symbol ``TSTN' on the Nasdaq, is scheduled to begin trading on Tuesday.
``At this point, our data is showing that the IPO is slightly bullish ... if we see them price above range, increase the range or increase the number shares then it's going to be an indication that it will very hot deal,' Ostman said.
Turnstone makes products that help local telephone companies to boost the capacity of phone lines to allow transmission of voice, data and video at high speeds through Digital Subscriber Line (DSL) technology. Turnstone's products help companies to install and maintain telephone lines for DSL services on an automated basis and from a remote location.
``I think there is certainly still a buzz about DSL,' said Mark Zohar, an analyst at Forrester Research. ``I think it will do well, but I don't think it will be a huge first day.'
The company lost $4.7 million in its first year of operations which ended Dec. 31, 1998 and $232,000 in the year ended Dec. 31, 1999, according to its filing with the Securities & Exchange Commission. Turnstone said it only recently became profitable on a quarterly basis, but may not maintain or increase its profitability.
Turnstone listed a number of companies as competitors, including Hewlett-Packard Co.(NYSE:HWP - news), Lucent Technologies Inc. (NYSE:LU - news), Nortel Networks Corp.(Toronto:NT.TO - news) and Teradyne Inc. (NYSE:TER - news).
``I'm certain they will get a lot of competition from the big guys, but if they can get their foot in the door they could do well,' Ostman said. |
