Corio shares finish strong in market debut
After braving a market that is slowly showing signs of life, the application service provider's stock closes up more than 40 percent on its first day of trading.
Corio, which increased the share price target of its initial public offering (IPO) late yesterday from a previous range of $11 to $13, ended regular trading at $19.69 on volume of 14.1 million shares.
San Carlos, Calif.-based Corio, which filed for its IPO in April, sold 10 million shares at $14 per share to raise $140 million in the offering.
Corio competes in the nascent application service provider (ASP) market against rivals USinternetworking, Breakaway Solutions, MarchFirst, FutureLink and others. ASPs manage, implement and remotely host business software from a data center, ridding its clients of having to deal with software installations and upgrades that tend to be complicated and expensive.
Market research firm Giga Information Group pegs the ASP market to reach between $2 billion to $6 billion by the end of 2002.
Corio is one of several companies braving an IPO market that has recently shown signs of life after being stung by the spring technology correction that sent most tech stocks tumbling.
Earlier this week, Airspan Networks, which makes equipment used to transmit wireless voice and data, rose 227 percent to $49.03 in its IPO. The Uxbridge, England-based company raised $82.5 million through the sale of 5.5 million shares at $15 on the Nasdaq, just over the top of its $12 to $14 price range. The company settled down at $31.94 at the end of its first trading day.
Corio, which plans to use the net proceeds from the offering to pay off debt and for working capital and general corporate purposes, currently rents business applications from software makers including PeopleSoft, SAP, Commerce One and BroadVision.
The offering is being led by Goldman Sachs and co-managed by underwriters Merrill Lynch, Robertson Stephens and Epoch Securities. The company began trading on the Nasdaq slightly before 10 a.m. PT today under the ticker symbol, "CRIO."