EGain Communications Corp. (Nasdaq: EGAN) lived up to its name and gained at e-speed, closing up 11, or 92 percent, to 23 in its debut Thursday. The stock surged as high as $40 a share in early trading.
The e-mail services company priced its initial public offering of 5 million common shares at $12, above its estimated range of $9-$11 each.
eGain, like Kana Communications, which went public Wednesday, is expected to generate solid interest because it fills an almost empty niche in the e-commerce world: customer service.
E-commerce is "finally shifting to customer service as an integral part of e-commerce. It was initially sales-focused,'' said Bob Chatham, a senior analyst at Forrester Research. Silknet Software Inc. (Nasdaq: SILK), which had a successful debut this spring, also compares to Egain and Kana.
For the year ended June 30, Egain posted a net loss of $11.3 million on revenue of just $1 million.
Egain's customers include both Internet companies such as Go2Net, Snap.com and WebTV, and traditional companies engaged in eCommerce, such as Mazda USA and FCC National's Wingspan Bank.
Risks cited in Egain's regulatory filings include concentration of its revenue in limited customers. In fiscal 1999, FCC National and WebTV, accounted for 15.6 percent and 10.8 percent of total revenue, respectively.
EGain, which helps companies deliver customer service via e-mail, plans to use the estimated $45 million in net proceeds for working capital and other general corporate purposes, including product and services development and network expansion
In case of heavy investor demand, eGain has granted the IPO underwriters -- BancBoston Robertson Stephens, Donaldson Lufkin & Jenrette and Volpe Brown Whelan & Co. -- an option to buy 750,000 more shares.
Reuters contributed to this report.