Silver Spring Surges After IPO Raises 21% More Than SoughtLee Spears
Silver Spring Networks Inc., the maker of networking equipment for smart electricity grids, surged in its first day of trading after raising 21 percent more than planned in a U.S. initial public offering.
The stock rose 29 percent to $22 at the close in New York. Redwood City, California-based Silver Spring yesterday raised $80.8 million selling 4.75 million shares for $17 each. The company had offered 3.71 million shares, equivalent to an 8.4 percent stake, for $16 to $18 apiece.
Silver Spring’s offering attracted higher-than-expected demand as U.S. IPOs have raised $6.6 billion this year, more than double the amount in the year-earlier period, and the Dow Jones Industrial Average has risen to record levels this month. The company planned to raise an additional $12 million in a private placement with venture-capital firm Foundation Capital, its biggest shareholder, filings show.
Revenue at the power-grid networking company declined 17 percent to $196.7 million in the 12 months through December compared with the previous year, regulatory filings show. It recorded a net loss of $89.7 million, narrower than the $92.4 million loss a year earlier.
The company was founded in 2002 and provides customers with hardware and software that enable power providers to offer flexible pricing and monitor the health of power grids. Sales have withered partly because of slow adoption of smart-grid technology, caused by uncertainty over the timing of U.S. stimulus spending and regulatory investigations, the filings show.
Goldman Sachs Group Inc. and Credit Suisse Group AG led the IPO. The stock is listed on the New York Stock Exchange under SSNI.