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Stock jump wakes IPO market from slumber

Marvell Technology and Stratos Lightwave soar in their first day of trading and another debutant posts gains, evidence that the IPO market is again capable of producing returns.

Two of today's four initial public offerings soared in first-day trading, evidence that the IPO market is again capable of producing sizable returns.

Marvell Technology Group led the quartet as its shares jumped 322 percent in early trading to $63.31 before slipping to close at $56.63. The Bermuda-based company, which makes integrated circuits for broadband data communications, raised $90 million through the sale of 6 million shares at $15 each, about $6 million more than was expected.

Seagate Technology, Samsung, Hitachi, Fujitsu and Toshiba are customers of Marvell, which trades under the symbol "MRVL."

Shares of Stratos Lightwave, a unit of Methode Electronics, also jumped in early trading. Priced yesterday at $21, the shares climbed to as high as $56.13, a gain of 167 percent, before sliding back to close at $34.13.

Stratos raised $184 million yesterday through the sale of 8.75 million shares, 17 percent more than was expected. The company sells optical components and cable assemblies to industry giants such as Cisco Systems, Nortel Networks and Alcatel.

The strong performance "could have something to do with the underwriters," said IPO Value Monitor's research director, Steven Tuen. "Marvell is underwritten by Goldman Sachs and Stratos by Lehman. Goldman is really seen as a top-tier underwriter."

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Forecast Shares of Click Commerce, which raised $50 million yesterday from the sale of 5 million shares at $10 each, jumped to as high as $20 before slipping to close at $17.63.

The company's software lets manufacturing companies track inventory levels and conduct business with customers and distributors online. Click Software trades under the ticker "CKCM."

Today's trio of successful IPOs indicates that the three-month slump in the IPO market may be over--at least for select companies. In another sign of the recovery, 20 IPOs are being launched this week and could raise $4.3 billion, according to Jeff Hirschkorn, senior analyst with IPO.com. For several weeks, the number of companies launching IPOs had dipped to single digits.

Meanwhile, today's other tech IPO did not benefit from the momentum of Marvell, Stratos and Click Commerce. Shares of eFunds, which provides electronic debit payment processing and other services, were little changed at $13 by market close.

eFunds raised $71.5 million through the sale of 5.5 million shares at $13. As an indication of weak demand, the shares priced $1 below the expected range, and the number of shares sold was cut by 750,000.

"Anytime you cut an offering people lose interest," said Jeff Hirschkorn, a senior analyst with IPO.com.

eFunds is hoping to cash in on the growing market for debit cards. Debit card payments will make up 14 percent of total U.S. consumer spending by the year 2005, compared with 4.9 percent of transactions in 1998, according to the Nilson Report. eFunds trades under the symbol "EFDS."