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Riverbed Technology Leaps in IPO
(Washington) - September 21, 2006 -- Shares of Riverbed Technology Inc. soared Thursday in their trading debut.
The San Francisco-based company, which makes network infrastructure products for computer systems, saw its stock rise $5.55, or 57 percent, from the IPO price to close at $15.30 Thursday on the Nasdaq Stock Market.
Riverbed's shares opened at $14.60 on the Nasdaq, well above the IPO price of $9.75 a share.
A total of 8.8 million shares were sold to investors, and the deal priced above the expected range of $7 a share to $8.50 a share. Goldman Sachs Group Inc. managed the offering.
The company's market is a fast-growing one, and Riverbed's revenue has increased rapidly since it was formed in 2002.
For the first six months of this year, Riverbed's revenue grew sixfold to $31.8 million, compared with the same period in 2005. Revenue climbed as the company gained new customers and sold more equipment to existing customers.
However, Riverbed is still a young company that is in the process of building up its sales and marketing force, so its expenses are currently outpacing revenue growth.
Its net loss in the first half of 2006 widened to $10.3 million, compared with $8.3 million in the first half of 2005. The company said it plans to continue investing heavily in sales and marketing by hiring more employees, and warned that it doesn't know when or if it will ever be profitable.
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