Who knew? The IPO market is doing well. Despite a glum market day featuring extreme weakness in bonds and a lackluster stock market, three companies went public today with roaring debuts: Calix Networks, Maxlinear, and First Interstate Bank.
MaxLinear, which makes RF (radio frequency) chips for consumer devices such as settop boxes and mobile phones opened 31% higher in a New York Stock Exchange listing, while broadband equipment maker Calix Networks Inc. rose 28% on its first trade, also on the NYSE. A regional bank system, First Interstate, opened 10% higher on the Nasdaq. Three for three, not bad! I guess the underwriters have got their pricing right.
The new issuance shows investor demand for relatively young, growing companies. MaxLinear sold 6.4 million Class A shares, one million more than originally expected, at $14 a share. Calix priced 6.3 million shares at $13, the high end of its $11 to $13 range. First Interstate BancSystem Inc. sold 1.3 million more shares than expected, but priced them at $14.50, toward the lower end of its $14-$16 range.
The IPO of Calix System is of special relief to me, as my former outfit Light Reading had been looking for the company’s IPO since about 2004. Finally Calix CEO Carl Russo, the former startup CEO who scored a $7 billion dollar deal in selling Cerent to Cisco Systems in 1999, has had (another) big day!
All three companies appear to be riding some nice trends: Calix focuses on broadband access equipment, which could be getting a boost from a national broadband policy. MaxLinear is riding the wave in the mobile wireless market, and First Interstate is benefitting from a rebound in national banking, as consumers shy away from the big bad “too-big-to-fail” banks.