Oplink Communications soars in IPO

Shares in Oplink Communications, which makes fiber-optic components for optical networks, nearly doubled in the company's IPO today as investors grabbed the stock, along with other technology shares, driving the Nasdaq up after a three-day losing streak.

Shares of San Jose, Calif.-based Oplink rose as high as $36 today before slipping to close at $33.63, still up 87 percent, or $15.63. In its initial public stock sale to institutional and other large-scale investors, the company raised $246.6 million through the sale of 13.7 million shares at $18 each, the top of its upwardly revised price range of $16 to $18.

Analysts and investors have been bullish on Oplink Communications, which sells its components to networking heavyweights such as Lucent, Sycamore Networks and JDS Uniphase.

With the rapid growth of the Internet, networking companies are building optical networks at lightning speed, creating a greater demand for components and boosting investor interest in the companies that sell them. Fiber-optic networks allow data to speed along pathways more efficiently than along the traditional copper wire networks, which are designed for the transmission of voice rather than data.

IPO forecast

"There's an extreme demand for optical component companies because there's such a small supply of those companies out there," said Paul Bard, an analyst with the Renaissance Capital IPO Plus Aftermarket Fund.

Oplink has shown considerable growth, with revenues increasing over 300 percent to $39 million in the year ended June 30, 2000, from $9.1 million in year earlier. Still, the company has not yet shown a profit, losing money every year since 1996, according to its prospectus filed with the Securities and Exchange Commission.

Oplink trades on the Nasdaq under the ticker symbol "OPLK." Robertson Stephens handled the sale.