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DiggTwo new chip stocks made some initial headway in a tough market Friday. The shares of the best performer of the two newly public companies--Intellon Corp. [ITLN], a maker of chips that enable networking over electrical wires--climbed about 12%, to $6.72 in early afternoon trading, after an initial 32% spike. Shares of Memsic Inc. [MEMS], an Analog Devices Inc. [ADI] spinout that makes tiny chip-based components that measure vibration and other real-world data, rose 3.1%, to $10.31.
Shares of each company gained in large part because their underwriters dropped the IPO pricings. Memsic had expected to price between $11 and $13 per share, while Intellon priced well below its proposed $9 to $11 range.
Good thing. Friday was a challenging day for chip stocks, which were trading down with few exceptions. More broadly, the expected downturn in the notriously cyclical chip industry has put a hex on stock performance in the sector for some time. The Philadelphia Semiconductor Index [SOXX], which comprises the stock of 19 of the biggest chip industry companies, has declined 31% from a high of 546.6 in July.
So it's no suprise that other recent chip IPOs have lost much of their initial gains. Entropic Communications Inc. [ENTR], a home networking semiconductor maker that on Dec. 7 went public at $6 a share, dipped to $6.10 in early trading Friday after posting a 40% gain during its first day of trading. In that case, too, underwriters had chopped the IPO price from an earlier expectation of pricing between $9 and $11 per share. - Olaf de Senerpont Domis
See December IPO calendar from TheDeal.com
See Dec. 7 story from Tech Confidential
