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Sonus Networks makes dazzling debut

Sonus Networks (Nasdaq: SONS) blasted up 27 1/2, or 120 percent, to 50 1/2 Thursday in its initial public offering.

The networking company tagged 5 million shares at $23 each, vaulting over its proposed range of $19 and $21 a share.

Sonus' products, which include switches, management software and signaling gateways, deliver voice over data networks. The company offers its products to long distance carriers, Internet service providers, cable operators and international phone companies. ONI Systems (Nasdaq: ONIS), another promising offering slated for this week, was also expected to price, but has been delayed for the third time. ONI is now expected to price Thursday night for trading Friday.

Sonus' financials are rather underdeveloped. The company just started shipping its products -- for the quarter ending March 31, revenue was just $1.1 million with a loss of $16 million. As of March 31, the company had an accumulated deficit of $50.0 million.

The company has some big customers, including Williams Communications (NYSE: WCG), Intermedia Communications (Nasdaq: ICIX) and Global Crossing (Nasdaq: GBLX).

Sonus also has some blue-chip backing: Goldman Sachs is its lead underwriter and Matrix Partners, North Bridge Ventures and Bessemer Venture Partners are VC investors.

Sonus counts Cisco (Nasdaq: CSCO), Lucent (NYSE: LU), Nortel (NYSE: NT) and Tellabs (NYSE: TLAB) among its competitors.

Among other IPOs Thursday:

  • Stanford Microdevices (Nasdaq: SMDI), which designs radio frequency components for communications equipment, closed up 1 5/8 to 15 3/8 in its debut. The company had priced 4 million shares at $12 a piece, the bottom of its $12 to $14 range.

    For the year ended December 31, the company reported a loss of $24.4 million on revenue of $18.1 million, as compared to net income of $279 000 on revenue of $8.2 million in 1998.

    Its revenue is concentrated in two main distributors; in 1999, sales through Richardson Electronics represented 38 percent of net revenues and sales through Avnet Electronics Marketing were 13 percent of revenue. Sales to Minicircuits Laboratories, a private label reseller, also accounted for 41 percent of net revenue in 1999.

    Stanford Microdevices competes with other suppliers of components used in the infrastructure of communications networks such as Agilent (NYSE: A), Anadigics (Nasdaq: ANAD), Conexant (Nasdaq: CNXT), Infineon (NYSE: IFX) , as well as communications equipment makers that manufacture components internally such as Ericsson (Nasdaq: ERICY), Lucent, Motorola (NYSE: MOT) and Nortel Networks.

    Lead Underwriter for the deal is Deutsche Banc Alex Brown; co-managers are Banc of America and CIBC World Markets.

    • IPO Insider >