NEW YORK, Feb 23 (Reuters) - Shares of wireless communications service provider Nextel Partners Inc.'s (NASDAQ: NXTP) initial public offering posted solid gains on Wednesday, reflecting strong demand on Wall Street for the wireless sector.
Shares of Nextel Partners closed 10-1/8 higher to 30-1/8 on the Nasdaq following the company's $470 million IPO, a gain of over 50 percent.
"It's a strong showing," said Kenan Pollack, money editor at Hoover's Online. "It extends the wireless trend."
Nextel Partners had its 23.5 million share offering priced at $20 per share through joint lead underwriters Goldman, Sachs and Donaldson, Lufkin & Jenrette.
The Kirkland, Wash.-based company is the U.S. affiliate of wireless telephone company Nextel Communications Inc. (NASDAQ: NXTL), which is its largest shareholder, holding 36.5 percent of Nextel Partners' shares.
Pollack, who was impressed that an IPO of Nextel Partner's size performed so well, saw the company benefiting in the long run from the Nextel name.
"In the wireless world, it's as close to a brand name as you can get," said Pollack.
Nextel Partners primarily offers digital wireless communications services to mid-sized and smaller markets nationwide. As of Dec. 31, it had about 46,000 digital subscribers.
"It's such a great name," agreed Gerald Eddy, senior editor at Market Logic. "It should at least stay in lock-step with (the wireless industry), if not a few steps ahead."
Nextel Partners posted an operating loss of $40.7 million which includes stock-based compensation expenses for the quarter ended Dec. 31, versus a loss of $11.2 million for the three months ended Sept. 30, according to its filing with the Securities and Exchange Commission.
The company said it will use the proceeds of the offering for general corporate purposes, including the expansion of its digital mobile network, future acquisition of additional frequencies as well as the introduction of new services and sales activities.
Nextel Partners has about 236.7 million shares outstanding after the IPO. |
