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Genuity's IPO sparks little interest on Nasdaq

Shares the company, which claims to have delivered the first email, slide 30 percent by market close.

Shares of Genuity, the company that claims to have delivered the world's first email message, declined in first-day trading today after the company raised $1.9 billion in one of the nation's largest technology IPOs.

The company, a spinoff of phone company GTE, hit a high of $11.25 before falling back to $9.41 by market close. Yesterday, the company sold 173.9 million shares at $11 each, raising $1.9 billion, about $400 million less than was expected. The company had hoped to raise up to $2.3 billion.

Nevertheless, the IPO is one of the largest for a technology company. AT&T Wireless, which raised $10.6 billion in its IPO on April 26, was the nation's largest IPO.

Genuity's IPO is the result of a merger by parent company GTE with Bell Atlantic. The merged company will be renamed Verizon.

Verizon is forbidden from owning more than 10 percent of a company in any area where Bell Atlantic already dominates the marketplace. Genuity, which is considered a long-distance service provider, does overlap with Bell Atlantic territory.

Until Verizon can convince the Federal Communications Commission that Bell Atlantic's markets are competitive, it will retain only a 10 percent stake of Genuity. If the company passes regulatory hurdles, it will have the option of owning an 80 percent stake, according to Genuity's filing with the Securities and Exchange Commission.

Founded in 1948 as BBN, Genuity helped design and implement Arpanet in 1969, considered the precursor to the Internet. In 1997, GTE acquired the company. In its SEC filing, Burlington, Mass.-based Genuity takes credit for delivering the world's first email.

The company, which trades under the symbol "GENU," lost $210 million in the first quarter on revenues of $248 million.

Genuity provides dial-up networking, Web hosting and other Internet services. The company puts identical Web servers at various sites around the country, thus minimizing the distance between Internet users and its Web servers.

Genuity also developed a technology called Hopscotch, which tests the Internet and determines the quickest path to send data. If a particular server or Internet path is busy, it routes the request to another server.

America Online, EarthLink, NetZero, Microsoft and WebTV are among Genuity's largest customers. CNET Networks, publisher of, also is listed as a customer.