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Tech Industry

Net2000 zooms in IPO debut

Net2000 Communications Inc. (Nasdaq: NTKK) gained 75 percent in its public trading debut Tuesday.

The broadband telecommunications services provider's initial public offering rose 15 1/16 to 35 1/16 on Tuesday. The stock opened at 37 and rose as high as 40.

Net2000 priced 10 million shares at $20, the top of their proposed range of $18 to 20 a share.

Net2000's range was raised from $13 to 15 a share in a sign of strong demand.

"It has solid numbers and notable client like AskJeeves (Nasdaq: ASKJ), and Cable and Wireless (NYSE: CWP)," said Kenan Pollack of IPO Central, who named the stock as one of the week's hottest offerings.

The offering, led by Goldman Sachs, will leave about 34.8 million common shares outstanding after the initial public stock sale.

Net2000 said it plans to use the offering's proceeds to expand its sales force, to repay debt, for working capital and for other general corporate purposes, including funding operating losses. The company predicted it would make about $175.4 million in net proceeds under the new range compared with $129 million under the old one, according to a Securities and Exchange Commission filing.

"Its financials are pointing towards a success story," said David Menlow of, despite the fact that losses outpace revenue.

The company had a net loss of $38.8 million on revenue of $27.7 million for 1999, compared to a loss of $13.8 million on revenue of $9.4 million for 1998.

The company began operating as a competitive telecommunications provider in July 1998. Prior to that, it was a sales agent for Bell Atlantic (NYSE: BEL), with which it now competes.

Other competitors include traditional telephone companies, AT&T (NYSE: T) and MCIWorldCom (Nasdaq: WCOM).