Aruba's IPO Fillip
Third-ranked enterprise wireless LAN hardware maker Aruba Networks Inc. (Nasdaq: ARUN) appears to have bucked the dour trend of some recent tech IPOs with its first public offering this week. The company brought in $88 million with the float and saw shares jump 29 percent in the first day of trading yesterday.
The 8 million shares in the offering sold for $11 each, over the forecasted range of $8 to $10 a share. Unlike the much more fancied Clearwire LLC (Nasdaq: CLWR) IPO this month, however, Aruba seems to be staying strong after the initial burst out of the gate. (See Clearwire's Bubble Bursts and Aruba Plots $80M IPO.)
Aruba's first day of trading opened at $14 a share and closed at $14.15 each. In trading late this morning the stock maintained that uplift; hitting $15.50 even after the wider market grew jittery on Fed inflation comments.
There had been some concern about the prospects for mobile and wireless-related IPOs this month after Clearwire's stumble. Investors, however, appear to have realized that Aruba works in the much more established enterprise WiFi sector, which is less of a long bet than Clearwire's WiMax ambitions. (See Whither Wireless IPOs?.)
Aruba's rivals in the market include Cisco Systems Inc. (Nasdaq: CSCO), which dominates both business and consumer WiFi, and Motorola Inc. (NYSE: MOT)'s Symbol unit. The money raised in the float should help, Sunnyvale, Calif.-based Aruba compete. It says it will use the new cash for R&D and expanding its sales team.
— Dan Jones, Site Editor, Unstrung