Popularity of Technology Lifts Share Offering by Smith Micro : Finance: Aliso Viejo software firm’s initial public offering soars 21% on its first day of trading on Nasdaq.
ALISO VIEJO — Smith Micro Software became the latest beneficiary Tuesday of investors’ infatuation with stocks of high-tech companies.
The stock of the Aliso Viejo software company surged nearly 21% in its first day of trading on the Nasdaq market. The stock closed at $14.50, up $2.50 a share.
The company offered 3.4 million shares of stock. More than 4.1 million Smith Micro shares changed hands Tuesday, meaning that some shares were traded more than once.
“Technology stocks have really dominated the initial public offering market this summer,†said Joanna M. Kolor, associate editor of the IPO Reporter, a market industry publication based in New York. “A 20% gain in the first day of trading has not been unusual.â€
Investors may also have been attracted by Smith Micro’s recent announcement that it has signed a one-year deal to continue selling its software for modem and fax communications to its biggest customer, U.S. Robotics Inc., a data communications company based in Skokie, Ill., said Bill Smith, an analyst with Renaissance Capital in Greenwich, Conn.
Smith Micro reported profit of $2.4 million for the six months ended June 30, nearly double its profit of $1.3 million for the same period a year ago. Revenue for the six months rose to $8 million from $4.3 million.
Most of the $40.8 million raised from the offering will be used for general corporate purposes, including paying off a $3.8-million promissory note.
The company was founded in 1982 by William and Rhonda Smith, the top executives. The Smiths, who are married, owned 75% of the shares after the offering.
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