Infinera finds success with IPO

SUNNYVALE, CA-In what analysts are calling one of the hottest high-tech public offerings this year, Infinera raised $182 million on June 7, with share prices jumping 52% on their first day of trading.

SUNNYVALE, CA-In what analysts are calling one of the hottest high-tech public offerings this year, Infinera raised $182 million on June 7, with share prices jumping 52% on their first day of trading. The company’s stock, which will trade on Nasdaq under the symbol “INFN,” was originally offered at $13/share but traded as high as $19.70. The offering price gives the company an initial market capitalization of $1 billion.

Infinera, which makes all-optical chips for telecom, plans to use net proceeds from the IPO to augment working capital, for general corporate purposes, and possible acquisitions. The company’s prospectus states that it is leading a market that will “change optical communications networks in a fashion similar to the integrated circuit’s impact on electronics beginning in the 1950s.” With the increasing growth in video and other multimedia data streams, the market opportunity for optical telecom is significant. Infinera believes that its addressable market will go from $3.7 billion in 2007 to $13 billion by 2010. According to news reports, Infinera continues to win against competitors ranging from Cisco to Nortel and Ciena. The company currently claims 28 customers, including Qwest Communications and Level 3 Communications (the latter being Infinera’s largest customer, accounting for 75% of the company’s revenues).

Infinera recorded revenue of $58.2 million for the year ended Dec. 31, 2006, and a net loss of about $90 million. That compares with revenue in 2004 and 2005 of about $600,000 and $4 million, and net losses of about $66 million and $65 million, respectively. In the first quarter of 2007, the company had sales of $49.2 million and a net loss of around $20 million.

As of mid June, Infinera’s stock was trading around $24/share.

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