Syed Ali’s Cavium lists on NASDAQ, rises 22 pc
Date: Thursday , May 31, 2007
Cavium Networks made a strong debut on the NASDAQ (National Association for Securities Dealers Automated Quotation System) powered by its oversubscribed initial public offering.
Shares of the Syed Ali founded semiconductor company closed their first day of trading on the NASDAQ bourses at $16.22, 22 percent above the Initial Public Offering (IPO) of 6,750,000 shares of its common stock at a price of $13.50 set by underwriters.
The company has granted the underwriters a 30-day option to purchase up to 1,012,500 additional shares of common stock at the IPO price, less underwriting discounts and commissions, to cover over-allotments, if any.
The IPO price of Cavium, which listed under the symbol “CAVM”, was above the expected price range of $12 to $13 a share. The price had been upgraded earlier in the first week of May from $10 to $12 because of the strong demand for the stock. Some 6.75 million shares were sold into the offer, more than the original target of 6.25 million.
“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 told AP. The company’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.
As of last year, Cavium had more than 100 customers, including Aruba Networks, Cisco Systems, Citrix Systems and F5 Networks. Since its first commercial shipments in 2003, the company has shipped more than 1.7 million processors. It 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.