Surf's not up in Endwave's IPO

Shares of Endwave, which makes radio frequency subsystems used in broadband wireless systems, barely moved in trading Tuesday as the Nasdaq slid as much as 80 points.

IPO forecast

The stock briefly fell below its offering price, hitting a low of $13.50, before climbing to a high of $14.91. Shares began trading at $14.03 and closed at $14.06. Monday night, Endwave raised $84 million through the sale of 6 million shares to institutional investors at $14 each, the middle of the range.

David Menlow, president of the IPO Financial Network, said that while Endwave is a solid company with an interesting technology, investors are nervous about which company will emerge as the next leader.

"The problem is there are so many technologies out there, that investors are not at all comfortable as to what will be the next standard in the marketplace," Menlow said. "There may be another company around the corner that has a better technology."

Endwave's products include antennae, transmitters and receivers. These parts are used in broadband wireless systems, which can provide high-speed access for buildings not in direct reach of a fiber-optic network. Rather than laying more fiber-optic cable to reach every location, broadband wireless systems connect locations to existing networks.

"It's a lot easier to put up a radio than dig a trench and install a fiber-optic link," said Endwave co-founder and executive vice president Doug Lockie. "In a city, it costs about a million dollars a mile, and a radio can be put up for a small fraction of that."

Endwave customers include telecom equipment makers Hughes Electronics, Nokia and Nortel Networks. These systems integrators, in turn, refine and sell the completed broadband wireless systems to the actual communication-service providers.

Endwave is the result of a March 2000 merger between Engate and TRW Milliwave. The Sunnyvale, Calif.-based company will trade on the Nasdaq under the ticker symbol "ENWV." Deutsche Banc Alex Brown handled the sale.