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BackWeb hustles up 64 percent in first trading day

BackWeb Technologies Inc. (Nasdaq: BWEB) closed up 7 11/16, or 64 percent, to 19 11/16 in its initial public offering after opening at 20. The stock surged as high as 22 1/2 at one point Tuesday.

The company priced its IPO of 5.5 million shares at $12 a share late Monday.

The offering price was raised on Monday to $10 to $12 from $7 to $9 a share. Goldman Sachs is the lead underwriter.

BackWeb, one of the early "push technology" pioneers, has reshaped itself into an Internet software company. BackWeb, based in Israel, competes with Marimba Inc. (Nasdaq: MRBA), which made a big IPO splash in April, jumping 220 percent on its first day. Shares of Marimba have fallen since.

BackWeb's applications update software and deliver other information to desktops while corporate networks are idle. The company counts AT&T, Cisco Systems, Goldman Sachs, Pacific Bell and Rite Aid among its top customers.

The company said its goal is to become the "de facto standard for Internet communication infrastructure software."

For 1998, BackWeb reported revenue of $9.5 million and a net loss of $14.8 million. For the quarter ending March 31, the company had revenue of $4 million and a loss of $3.68 million. BackWeb has an accumulated deficit of about $41.2 million.

Risks include long sales cycles and expected competition. In addition to Marimba, BackWeb expects competition from IBM and Sun Microsystems. "Competition could result in price reductions, fewer customer orders, reduced gross margin and loss of market share," the company said it regulatory filings.