June 20, 1997 2:45 PM PDT
Great Plains IPO takes off
Great Plains, which settled on a target price of $16 a share, jumped to $30 on the first trade of the day and closed at 32-3/8.
That sort of enthusiasm likely influenced the company's decision yesterday to raise its IPO pricing range to $14 to $15 a share from its previous $10 to $12 range.
The company floated out 3 million shares, raising $48 million in capital. That's a 33 percent increase over the $36 million the company would have raised under an IPO priced at $12 a share. The higher pricing also gives Great Plains a market valuation of $206.8 million.
"This is a further sign of the buoyancy in the high-tech IPO market," said Richard Peterson, an IPO analyst with Securities Data. "The fear in the spring [of a slowdown] has turned into hope in the summer and, perhaps, a harvest in the fall."
However, several small-cap portfolio managers, who usually review IPO road shows of high-tech companies, said that they have not seen these three companies come by with their presentation.
Last month, the three companies registered their IPOs with the Securities and Exchange Commission, about the time that online bookstore Amazon.com (AMZN) and interface technology company Rambus (RMBS) launched their initially successful IPOs. Currently, Amazon is trading at its IPO price, while Rambus' stock has rocketed up more than three times its initial price.
Great Plains, in its SEC filing, noted net profits have been virtually flat for the first nine months of the year. During the first nine months, ended February 28, the company reported profits of $2 million, virtually unchanged from the same period a year ago. Revenues for the nine-month period, meanwhile, climbed to $39.5 million from $29.2 million a year ago.