e latest in a growing line of San Diego tech firms to strike it rich with an initial public offering. Wall Street is in love with high-tech companies, and JNI’s remarkable one-week climb from its IPO on Oct. 27 of $19 to nearly $100 a week later is only the most recent example of this affection.
You can tick off several local companies and the incredible success on the stock market: Leap Wireless, the spinoff from Qualcomm, Inc., was hovering around $4 per share this time last year; now it’s at $45. The Carlsbad biotech firm Invitrogen has enjoyed tremendous success since going public in late February. And of course, there is MP3.com, which turned company exec Michael Robertson into a billionaire within a matter of weeks.
There are the obvious benefits of this unprecedented run on stocks: More jobs, better wages and some very wealthy CEOs. The rest of the economy, of course, feeds off this newfound wealth as well.
Remember, at this time last year many were moaning after a particularly bumpy October. The New York Stock Exchange took a one-day tumble of 200-plus points and suffered through several other rough days that month.
But there was no Red October this year. We braced for what seems like an annual rite of fall, yet it never came. Forecasts to sell off tech stocks in anticipation of a nasty crash never came true.
What’s more, two tech stocks were added to the Dow Industrials last month. Microsoft and Intel are now barking with the big dogs, so to speak, lending even more credibility to investing in tech stocks.
We not only survived October, we thrived, thanks largely to investors’ optimism in high-tech. JNI’s wild success merely put the exclamation point on a very positive month.
However, we must temper our enthusiasm just a bit with a dose of reality. Companies like Comps.com, an Internet real estate compiler, and Women First, an Internet health care information provider, had less-than-spectacular results upon going public. Maxwell Technologies, one of the brightest high-tech defense contractors, also has taken it on the chin lately. Its stock dropped by some $30 since its 52-week high of $40.25 at the end of 1998.
Not everyone will achieve on the level of JNI, but the UTC-based company has obviously built an outstanding product filling a need in the high-tech world. It is San Diego’s latest high-tech success story, but certainly not its last.