Nextel Partners (Nasdaq: NXTP) closed up 10 1/8, or 51 percent, to 30 1/8 Wednesday after pricing its 23.5 million-share offering at $20 a share.
Nextel Partners, the only U.S. affiliate of the wireless telephone company Nextel Communications (Nasdaq: NXTL), raised the price range for its initial public offering to $18-$20 a share from $15-$19 per share.
"With Sprint PCS about to get bought by WorldCom, and AT&T about to spin off its wireless unit, you can tell there's a lot of demand in this sector," said Kenan Pollack of IPO Central.
Nextel Partners (profile), which primarily offers digital wireless communications services in mid-sized and smaller U.S. markets, plans to sell 23.5 million shares.
For the nine months ended September 30, Nextel Partners had a net loss of $59.1 million on revenue of $20.6 million, compared to a net loss of $11.7 million on revenue of $2.1 million for the 1998 period.
As of September 30, 1999, the company had accumulated operating losses of about $30.9 million, and it said it expects to continue to generate negative cash flow from operating activities through 2003.
The company competes with Telecorp PCS (Nasdaq: TLCP), the largest AT&T (NYSE: T) wireless affiliate in the United States, with licenses covering approximately 16.5 million people. Two other AT&T wireless affiliates -- Tritel Inc. (Nasdaq: TTEL) and Triton PCS (Nasdaq: TPCS) -- are also publicly traded.
Nextel Partners said its business plan depends on Nextel completing its portion of the Nextel digital mobile network on schedule and continuing to build and sustain customer support of its brand and the Motorola iDEN technology.
Nextel Partners plans to reap about $376.5 million from the IPO which it says will go to the construction and expansion of its part of the Nextel digital mobile network as well as for future acquisitions of additional frequencies.
With about 236.7 million shares outstanding after the offering, Nextel Partners will have an initial market capitalization of more than $4 billion based on a $17 per share initial price, the midpoint of the narrowed price range.
Goldman, Sachs & Co. and Donaldson, Lufkin & Jenrette are the lead underwriters for the offering.