The stock opened at 24-7/8 after the company priced it at $10.50 a share and bumped up the number of shares offered by 1 million late yesterday. The stock peaked as high as 25-1/2 this morning, but ended the day at 17. Over 12 million shares traded hands.
"I think this IPO shows a lot of enthusiasm there is for the Internet companies, said Richard Peterson, an IPO analyst with Securities Data. He added that "the underwriters could have priced it higher, and now everyone could probably kick themselves." The company might have generated more capital with a higher offering price.
Spokesman Matt Wolfrom said that @Home is satisfied with the price of $10.50 a share, but said he could not comment further because the company is in a quiet period for 25 days from the launch date.
The company had raised its pricing range to $9 to $11 a share yesterday, up from its original range of $7 to $9 a share.
@Home, which provides Internet access by high-speed cable lines and modems, floated out 9 million shares this morning, a substantial increase from its earlier plans to sell 8 million.
@Home raised $94.5 million in capital, and by the end of the day had a market value of nearly $2 billion based on 117,520,996 outstanding shares.
Potential institutional investors who have seen the company's IPO "road show" said @Home's plans could bring back the "conceptual" IPO--companies which go public with a good idea but no profits.
But by raising the amount of shares to increase its market capitalization, @Home may have inadvertently excluded some small cap investors. Dick Gores, a small capital investor with Kemper Technology, said passing the $1 billion mark pushed the company into the big league, so he did not invest.
All investors might be concerned about another recent development. In the company's July 10 filing with the Securities and Exchange Commission, @Home said PCTV filed a complaint against the company, alleging trademark infringement and unfair competition based on the company's use of the @Home mark, and requested damages and injunctive relief.
The company said it uses the logo "@Home" for a weekly technology television show for novices. The show covers topics including the Internet, online services, multimedia, games, education, and entertainment programs.
@Home said it intends to defend the suit vigorously and does not expect the outcome of this litigation to have an adverse effect on the company's business, operating results, or financial condition.
The growth rate of @Home will largely be determined by the speed that cable companies provide their Internet access. An investor, who requested anonymity, said @Home's potential will become more evident in the next six to nine months, as cable companies expand the market for @Home and customers are given an opportunity to sign up for its service.
The company reported revenues of $1.8 million for the six months ending June 30. It posted a loss of $22.8 million for the period, up from $8.3 million a year ago.
@Home's filing comes amid a recent spurt of successful high-tech public offerings by Amazon.com, Rambus, and Great Plains Software. High-tech IPOs also are planned by Network Solutions, Concentric Network, and CMP Media.
One beneficiary of the renewed IPO fever has been high-tech venture capitalist Kleiner Perkins Caufield & Byers. The company helped finance @Home, Amazon.com, and Concentric.