Web software developer, Allaire has sold 2 500 000 million shares of common stock in its initial public offering to an underwriting group at $US20.
The group, composed of Credit Suisse First Boston, Dain Rauscher Wessels and NationsBanc Montgmery Security, appear to have bought at a bargain price as within three hours the share price increased to $US40 1/2.
However analysts are cautious about predicting that going public and the consequent dramatic reaction of the market is a positive indication for Allaire's worth. Jim Balderston, an Internet analyst at Zona Research actually views "doubling your stock price on opening day as almost a sign of failure."
More seriously he continued to explain that start up stocks often exceeded 400 per cent growth in their first day so this did not seem all that spectacular.
Industry caution is also a result of Allaire's poor showing in 1998 where in the first nine months it lost nearly $US8 million.
The initial buyers have an option to extend their involvement with the purchase of 375 000 additional shares.