AppliedTheory Communications Inc, the Great Neck, New York-based internet service provider got its initial public offering away yesterday at $16 per share, selling 4.5 million shares. They had a quiet opening day by recent standards, opening at lunchtime at $26.50 before falling back and closing at $20.50, a 28.1% increase on the offer price. A healthy 8.8 million shares were traded on the first day.
The company is a 1996 spin-out from the New York State Education and Research Network (NyserNet) which was formed in 1985 to connect New York universities and institutions to the net and it which claims to be the world’s first ISP. Under a complicated set of deals last year, IXC Communications Inc purchased a 34% stake in AppliedTheory and IXC investor Grumman Hill Investments III bought a further 17% of the company. But some of the directors also have stakes in those companies, which clouds who owns what after the IPO. However, chief executive Richard Mandelbaum remains the largest shareholder, with 35.8% of the company after the offering.
Most of AppliedTheory’s customers are large corporations, government and educational institutions. NyserNet was the organization that first connected IBM Corp and General Electric Co to the internet and PSINet Inc was spun out of NyserNet in 1990. The offer was lead managed by Bear Stearns & Co Inc, with CIBC World Markets and Lehman Brothers as co-managers and Wit Capital Corp as the e-Manager, as it likes to be known.
