by CIO Staff

Qimonda Stock Up On Debut

Aug 10, 20062 mins
Data Center

Shares of Qimonda, the world’s second-largest dynamic RAM (DRAM) maker by market share, rose 4.2 percent on its stock market debut Wednesday.

The company, a spin-off from Infineon Technologies, had lowered the offering price on its shares to US$13 each just ahead of the listing, far below the $16 to $18 it had been seeking earlier.

The shares ended the day at $13.54 on the New York Stock Exchange, while Infineon’s U.S.-listed shares increased 2 percent to $10.74.

The company may have lowered the initial share offering price to ensure a strong debut, said Kenneth Lee, a chip industry analyst at Primasia Securities in Taipei. Sentiment for tech sector shares remains weak globally, and there have been some high-profile disappointments so far this year.

A prime example is voice-over-IP pioneer Vonage Holdings, which saw its shares close at $14.85 when it listed in May, after being sold to investors and customers for $17 per share. The stock closed at $6.81 on Wednesday, nearly a third of its original price.

The debacle has put Vonage in a tough position with customers, some of whom have refused to pay for shares they ordered. Vonage has also faced shareholder lawsuits.

Such troubles with initial public offerings make it important for companies to strike an offering price low enough to attract interest and sustain some upward momentum in the share price. Qimonda said it lowered the price in part due to a challenging market environment.

-Dan Nystedt, IDG News Service (Taipei Bureau)

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.