Carbonite Inc., the Boston-based provider of online data-backup services, surged in its first day of trading after raising $62.5 million in a reduced initial public offering.
The stock rose $2.35, or 24 percent, to $12.35 as of 4:30 p.m. New York time in Nasdaq Stock Market trading, after reaching $13.40 earlier, a 34 percent jump. Yesterday, Carbonite sold 6.25 million shares for $10 each in its IPO, after initially offering them for as much as $17.
The company gained alongside U.S. stocks, which reclaimed some of the value lost in the past three weeks amid concern the global economy may relapse into a recession. The Dow Jones Industrial Average increased 4 percent after sinking yesterday to its lowest level since September 2010.
Carbonite proceeded with its IPO even as others were pulled amid plunging equity markets that sapped investor appetite for new stock. Eleven U.S. IPO pricings have been withdrawn or postponed since Aug. 7, the most in a week since 2000, according to data compiled by Bloomberg.
“In the middle of the roadshow, all hell broke loose in the markets and it looked like IPOs were getting pulled left and right,” Carbonite Chief Executive Officer David Friend said in a conference call with reporters today. “The publicity associated with going public is obviously beneficial to us, but more importantly, it gives us a currency that we can use for strategic acquisitions and other purposes.”
Proceeds from the sale will be used for working capital, Carbonite said in a filing with the U.S. Securities and Exchange Commission. The company announced its IPO in May, joining a flood of new filings for share sales.
Carbonite has reported total losses of $87.9 million since it was founded in 2005, according to the filing. The company had about $16 million of cash at the end of June, enough to fund operations for at least 12 months. Sales increased 63 percent in the six months through June to $27.2 million.
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