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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: Oeconomicus who wrote (2392)	4/19/1998 10:26:00 PM
From: halfscot	Read Replies (1) \| Respond to of 11568

Friday April 17, 1:17 pm Eastern Time Broadcom jumps 150 percent after IPO NEW YORK, April 17 (Reuters) - Shares of computer chip-maker Broadcom Corp. surged 150 percent in early trading Friday after the company went public on the Nasdaq. Shares were up 37 to 61 in heavy trading. They touched as high as 70. Broadcom makes chips that help bring Internet access to television screens through cable lines. The Internet connection, analysts said, made the deal super sexy and boosted demand to frenetic levels. ''We knew the stock would do well and recommended it as a short-term buy,'' said Robert Natale, new issues analyst at Standard & Poor's. ''But this is a buying frenzy, it's incredible. It's a sign of rampant speculation in the whole market,'' he said. The 3.5 million shares offered sold for $24 each to investors who could get in at the IPO price. Of the total number of shares sold, the company sold 2.75 million, raising $66 million. Company shareholders sold 750,000 shares. The deal raised more than double the company's hopes. When it first filed to go public, it estimated shares would sell for between $10 and $12 each. ''There's obviously an unsatiated demand for anything tech-related,'' said Ryan Jacob, director of research at IPO Value Monitor. The West Coast start-up firm, was profitable from its inception through 1996. But last year, it lost $1.17 million or about $0.04 a share as revenues exploded to nearly $37 million. The company has about 43.2 million shares outstanding. At the stock's latest price of 57 a share, that gives the company a market capitalization of $2.46 billion. Natale said Standard & Poor's is estimating 1998 revenues of $100 million and earnings of $0.08 a share. In 1999, they estimate earnings of $0.42 a share. ''This stock is trading at 145 times our estimate of next year's earnings. Its outrageous,'' Natale said. Broadcom has exclusive relationships with some big-name makers of cable modems and television set-top boxes. Some customers that are already shipping Broadcom products include 3Com Corp. (COMS - news), Bay Networks Inc. (BAY - news), and Cisco Systems Inc. (CSCO - news). Cisco is investing in Broadcom in the offering, buying a separate 500,000 shares for $24, the company said in its prospectus. Other companies that went public today: -- Britain's ARM Holdings Inc. (ARMYV - news) rose 13-3/8 to 42-3/8. The company designs computer chips for cellular phones and personal organizers. -- BrightStar Information Technology Group Inc. (BTSR - news) rose 4-1/8 to 17-1/8.