Wireless player Telaxis Communications Corp. (Nasdaq: TLXS) closed up 30 1/2, or 179 percent, to 47 1/2 Wednesday after pricing its shares at $17 each.
The company, formerly known as Millitech Corp., priced its 4 million shares above its projected range of $14 to $16 per share through lead underwriter Credit Suisse First Boston. A strong debut is expected from the fast-growing company; other wireless companies like Aether Systems Inc. (Nasdaq: AETH) and Wireless Facilities Inc. (Nasdaq: WFII) have made impressive IPOs recently.
Telaxis supplies high-speed wireless access equipment to network service providers like Newbridge Networks Corp. (NYSE: NN), and Motorola Inc. (NYSE: MOT), enabling Internet access, electronic commerce, remote access, telecommuting and extensions of corporate networks to branch offices.
For the nine months ended Sept. 30, Telaxis had losses from continuing operations of $5.9 million from sales of $5.5 million. This compares to net loss of $7.1 million on sales of $1.4 million in the same period of 1998.
The company has a limited history, considering the first volume order for its broadband point-to-multipoint wireless access products was just last June.
The company's reliance on Newbridge Networks could also pose a risk to business. Telaxis depends Newbridge to market, sell, install, finance and support the systems that include its products. Newbridge accounted for 83 percent of the company's sales in the nine months ended September 30. Newbridge's recent disclosure of a strategic action plan, which may include the sale of the company, makes Telaxis' dependence on it an even greater risk, the company said in its SEC filings.
Telaxis competes with Alcatel (NYSE: ALA), Ericsson (Nasdaq: ERICY) and Nortel Networks (NYSE: NT), as well as a number of smaller companies in the market for broadband point-to-multipoint wireless access equipment, the company said.
Reuters contributed to this report.