Netscape, which launched a hot initial public offering last year, priced its 5.6 million shares at 53-3/4 a share based on yesterday's close. In its registration filing last month, the company priced its shares much lower at 46-1/4 per share.
During trading today, Netscape's shares rose as high as 56 points per share.
"Netscape has a track record of earnings and Wall Street rewards good news," said Richard Peterson, IPO research director with Securities Data.
Netscape posted net profits of $7.7 million for the quarter ending September 30, up from $200,000 for the same quarter a year ago. The company earned 9 cents a share, beating analysts' estimates of 8 cents a share, according to First Call, a Wall Street research firm. Peterson noted that Netscape is one of the few high-tech companies to successfully pull off a secondary offering this year.
Netscape sold 2.25 million of the 5.6 million shares offered, with insiders and major shareholders selling the remainder.
The company will receive about $121 million from its secondary offering and company officials have said they will use the money to pay for future expansion. The proceeds will be spent on capital investments such as additional computer equipment, building improvements, and enlarging its management information systems.