SonicWall (Nasdaq: SNWL) made an impressive debut Thursday as its shares closed up 12 1/16, or 86 percent, to 26 1/16. After pricing at $14 a share, the stock moved as high as $29 a share in early trading.
The Internet firewall company priced at the top of its range after raising the price tag to $12-14 from $10-12.
Sonic Wall could be a "sleeper hit," said Francis Gasknis of the IPO Desktop. He said a 69 percent increase in gross margins in the September quarter and good revenue growth make this a promising offering.
Bear Stearns is the lead underwriter for the offering of 4.0 million shares, and Hambrecht & Quist and Thomas Weisel are co-managers.
The company had revenue of $10.7 million for the nine months ended Sept. 30, compared to just $924,000 for the same period in 1998. The company was also profitable, though just by $11,000 for the nine months ending Sept. 30, versus its net loss of $1.1 million for the nine months in 1998.
The company advises in its SEC filings that its recent strategy shift makes it a risky investment. Since its inception through 1996, SonicWall got most of its revenue from the sale of Ethernet products for Apple (Nasdaq: AAPL) computers. In October 1997, it introduced SonicWall products, and in 1998 decided to concentrate in the Internet security market.
In 1998 SonicWall's Ethernet revenue $5.17 million, and represented 69 percent of our total revenue. For the nine-month period ended Sept. 30, Ethernet product revenue was approximately $1.47 million, and represented 12.1 percent of total revenue. The company said it will stop shipment of Ethernet products by December 1999.
Among other IPOs Thursday:
Bear Stearns is the lead underwriter for the offering, Prudential Securities and Friedman Billings are co-managers.