NorthPoint shares jump following IPO

The digital subscriber line provider trades strong on its first day of trading following a successful initial public offering.

NorthPoint Communications shares traded strong on the first day of trading following a successful initial public offering.

The digital subscriber line provider gained 16.25 to close at 40.25 on the Nasdaq market, trading as high as 43.0625 at one point during the day.

NorthPoint had priced 15 million shares at $24 a piece with the help of lead underwriter Goldman Sachs early this morning.

Yesterday, NorthPoint increased its proposed IPO price range to $22 to $24 per share, up from an initial range of $16.50 to $19.50, according to an amended registration statement filed with the Securities and Exchange Commission.

The company also increased the number of shares it offered from 13 million to 15 million, making the IPO worth about $345 million. NorthPoint filed to go public in February.

Competitors Covad Communications and Rhythms NetConnections both wowed Wall Street with strong offerings earlier this year.

The first of the DSL providers to go out, Covad watched its stock more than double in January after pricing at $18 a share.

Rhythms shares priced at $21 each, above an already revised higher range, and proceeded to more than triple last month.

NorthPoint, like Covad, Rhythms, and other data-focused competitive local exchange carriers (CLECs), leases copper phone wires from local telephone companies and primarily sells them to ISP resellers on a wholesale basis to provide high-speed Net access and remote network connections to small and mid-sized businesses.

Microsoft recently invested $30 million in NorthPoint, which also counts Frontier and Verio among its stakeholders.

NorthPoint currently offers service in 17 markets and plans to enter 28 cities by the end of the year.

Reuters contributed to this report.

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