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OPTICAL OPENS EYES WITH STRONG IPO.

Byline: Robert Monroe Staff Writer

CHATSWORTH - Optical Communication Products proved Friday that the market for IPOs is not dead but merely more selective.

The stock rose 62.5 percent from its initial $11 asking price, closing at $17.88 and trading as high as $20.50 in its Nasdaq debut. The company and its lead underwriter, UBS Warburg, beat the odds many analysts had set for it, pleasantly surprising some.

``It's doing better than I expected really,'' said Steven Tuen, an analyst at IPO Value Monitor who thought it would be affected by the weak optical networking sector of late. ``It's probably because the offering price of $11 was attractive.''

The bargain price of the company's 10.5 million shares and its low trading volume point to a continued new sobriety among investors hung over from dot-com mania. A profitable company already, Optical resembles Ixia, a Calabasas maker of optical network testing equipment that held a successful IPO last month.

Ben Holmes, founder of ipoPros.com, a Boulder, Colo., firm, noted that a number of IPOs planned for this time have been scuttled, their backers not daring to face fickle investors. The few companies that stayed around benefited from the same pool of investment money looking to be spent prudently.

``What's left is a very selective market doing a limited number of deals,'' Holmes said, noting the stock was still less than $20 at the end of the day. ``These are very sane, very comfortable premiums.''

To Yusuf Haque, an analyst with IPO Maven, the offer and its conservative trading volume of 13.7 million shares reminded him of the old days.

January's first-day volume of 724 Solutions, for instance, was four times the number of shares initially offered, a sign of hype trading, Haque said.

Optical is evidence those days are over.

``It's very encouraging when you see an IPO come through the first day with low trading volumes,'' he said.
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Article Type:Statistical Data Included
Date:Nov 4, 2000
Words:322
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