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Network Solutions nets strong trade

Domain name registry Network Solutions this morning jumped into the public arena with a strong showing, as its first trade hit the market at nearly 40 percent above its target price.

    Network Solutions (NSOL) this morning jumped into the public arena with a strong showing, as its first trade hit the market at nearly 40 percent above its target price.

    The domain name registrar, which launched its initial public offering at a time when Congress is debating its future, entered the market with a first trade of $25 a share--up from the $18 a share price underwriters set last night.

    Shares of Network Solutions reached a day-high of 26-3/4 before closing the day at 23-5/16.

    Tom Blekley, a portfolio manager at Nicholas-Applegate, said in an interview yesterday that Network Solutions would likely trade in the $20 to $22 a share range on its first day.

    And Richard Peterson, an IPO analyst with Securities Data shared a similar view.

    "It is not unlikely that [this security] will trade above 20 by the close of its first day of trading," Peterson said yesterday.

    Network Solutions' shares edged down slightly after its open but was still in the mid-20s in early trading.

    Although the jump was strong, it paled in comparison to the highly successful IPO launch of @Home (ATHM), which roared out of the chute with a 130 percent jump over its target price, and Rambus (RMBS), which debuted with a 98 percent jump over its set price on its first trade.

    The offering generated $50.4 million in capital for Network Solutions, and gave the company a market value of $382.5 million at its open today based on its 15.3 million shares outstanding. Science Applications, meanwhile, will receive $9 million from the offering.

    Investors apparently are confident in Network Solutions, despite ongoing hearings in the the House Science Basic Research Subcommittee that could pull the carpet out from under the company. Congress' role in the
domain name game The first of two hearings on the future of the Net's domain name system got underway yesterday, and a second hearing is set for Tuesday. Network Solutions' agreement to register second-level domain names, such as the "news" in "news.com," or the "sec" in "sec.gov." is set to expire this March and is a topic of discussions in the hearings.

    Nonetheless, Network Solutions was able to set its target price on the higher end of its pricing range of $17 to $18 a share. And it raised it from a previous range of $14 to $16 a share.

    The company also increased the number of shares to 3.3 million--up from its earlier figure of 2.3 million, according to a Securities and Exchange Commission filing yesterday. Of those shares, 2.8 million was offered by the company and 500,000 offered by its parent company, Science Applications International Corporation, the company said in its SEC filing.

    Previously, all 2.3 million shares were being offered by Network Solutions.

    Hambrecht & Quist is the lead underwriter, but others include J.P. Morgan, and PaineWebber.