Syed Ali's Cavium lists on Nasdaq, rises 22 pc

NEW YORK: Cavium Networks made a strong debut on the NASDAQ on Wednesday, powered by its oversubscribed initial public offering.

Shares of the Syed Ali founded semiconductor company closed their first day of trading on the Nasdaq Stock Market at $16.22, 22 percent above the IPO price of $13.50 set by underwriters.

The IPO price was above the expected price range of $12 to $13 a share, which had been upgraded earlier this week from $10 to $12 because of strong demand for the stock. Some 6.75 million shares were sold into the offer, more than the original target of 6.25 million.

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Cavium?s chips enable customers to develop networking equipment that process voice, video and data traffic at high speeds, the so-called "triple play" of telecommunications services.

"Cavium is another IPO that is coming in the red-hot triple-play networking sector," Scott Sweet, managing director of IPOBoutique.com, an IPO research service near Tampa, Fla told AP.

Last year, the company had more than 100 customers, including Aruba Networks Inc., Cisco Systems Inc., Citrix Systems Inc. and F5 Networks Inc.

Since its first commercial shipments in 2003, Cavium has shipped more than 1.7 million processors.

The company intends to retain future earnings and not pay a dividend. Menlo Ventures, a venture capital firm, remains the company's largest shareholder with 25 percent, down from 29.9 percent before the IPO.