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Rambus IPO takes off

Chip interface technology developer Rambus' initial public offering posts the largest first-day gains of any IPO since last October.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Growing chip interface technology developer Rambus (RMBS) today rolled out a highly successful initial public offering, the largest first-day gainer of any IPO since October of last year.

Rambus, which has become an important player in the semiconductor industry since Intel (INTC) adopted its architecture, rang up its first trade for the day at 23-3/4 a share, up from its IPO target price of $12 per share. The stock today closed at 30-1/4.

That 98 percent jump is the largest gap between a target price and first-day trade since last October, said Richard Peterson, an IPO analyst at Securities Data.

Peterson noted that depending on how large a jump Amazon.com gets when it launches its IPO tomorrow, the groundwork may be laid for more IPO filings and pricings by other tech companies this year. Currently, 42 technology companies are registered for IPOs and are hoping to raise $1.2 billion in capital, Peterson added.

The IPO market has fallen on hard times this year, compared with last year's hot market.

"Last year, investors were treated to many stocks that shot up on the first day of trading. Technology IPOs averaged a 24.6 percent in 1996, but this year the first-day gain has typically been 11 percent," Peterson said.

Rambus stock performed strong throughout the day and showed no signs of a sell-off after its first few hours of trading, he noted.

Rambus floated out 2.75 million shares, raising $33 million in capital for the company.

Underwriters Morgan Stanley, Hambrecht & Quist, and Robertson Stephens have the option of purchasing up to 412,500 shares to cover overallotments.