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SolarWinds shares up 13 percent in debut |
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NEW YORK, May 20 (Reuters) - SolarWinds Inc (SWI.N) stock rose 13 percent in its trading debut Wednesday, putting it on pace to be the sixth consecutive U.S. IPO to have a first-day jump. |
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After trading as high as $15.16, SolarWinds shares eased by mid-morning on the New York Stock Exchange, changing hands for $14.18, or about 13 percent over the initial public offering price. |
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"Tech stocks have been mixed this year, but firms realize they have to be productive so they are renewing their equipment," said Linda Killian, a principal with Connecticut-based investment firm Renaissance Capital. |
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"There was scarcity to this deal," Killian added, explaining SolarWinds' strong pricing and debut. |
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The company's strong profitability was also a major draw for investors, another analyst said. |
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"For every dollar of added top line revenue, SolarWinds gets a bigger percentage of profit increase than their competitors, who have lower profit margins," said Francis Gaskins, president of research firm IPO Desktop. |
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SolarWinds shares opened at $15 the morning after the Austin, Texas-based company sold 12.1 million shares at $12.50 apiece, raising $151.5 million in the first IPO by a venture-backed technology company in the United States in nine months. |
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The IPO offer price had exceeded the estimate range in an oversubscribed deal. |
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If SolarWinds holds on to this first-day jump, it will be the sixth consecutive IPO on a U.S. exchange to do so this year, following such companies as satellite image maker DigitalGlobe Inc (DGI.N), whose shares jumped 13 percent in their debut last week, and language-instruction company Rosetta Stone Inc (RST.N), which rose 40 percent after its IPO. |
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SolarWinds' IPO was the sixth in the United States so far this year. |