Investors rediscover enthusiasm for IPOs
Shares of OmniVision Technologies, a maker of image sensors used in digital cameras and handheld computers, rise 159 percent to $33.75 in first-day trading.
OmniVision is also the fourth company this week to set its initial price above the expected range. Yesterday, the Sunnyvale, Calif.-based firm raised $65 million through the sale of 5 million shares at $13 each, $2 above the expected $9 to $11 range.
Only twice since April have five or more companies priced above their range. "It's a sign that investors are coming back to the IPO market," said Richard Peterson, an analyst with Thomson Financial Securities Data.
Shares of Triton Network Systems, Network Engines and Sunrise Telecom all gained more than 100 percent in intraday trading yesterday, even after their initial selling prices were raised.
The apparent upswing in the IPO market may not be a good thing, say some analysts. "That stuff is not healthy for the market; it's why we've had the difficulties we have with the market," said Vincent Slavin, an analyst with Cantor Fitzgerald.
Many of the companies showing strong first-day gains, however, have been profitable. In the year ended April 30, OmniVision reported a profit of $3.4 million on revenue of $40.2 million, a sevenfold increase from revenue of $5 million in 1999.
OmniVision trades on the Nasdaq under the ticker symbol "OVTI." Robertson Stephens handled the sale.