Internet Initiative Japan Shares Give Encore

Following a long summer of discontent and volatility, Internet Initiative Japan(IIJI), a Tokyo-based Internet services provider, has found itself exactly where it was six months ago.

That was when the company was finally approaching its long-cherished dream of listing its shares on the Tokyo Stock Exchange. IIJ's March quarter had shown it posting its third-straight quarter of rising profits, putting its shares in a strong position for a debut in Japan. Cross-ownership of shares among companies remains more common than in the U.S., so a listing there would help IIJ cement ties with its customers.

Then something odd happened. The Tokyo shares were to be priced according to the level of the Nasdaq shares, which debuted in 1999. Those U.S. shares tripled over a three-week period, right up to the pricing, then plummeted again. IIJ pulled the planned Tokyo offering following what was understandably tepid interest among would-be buyers.

On Wednesday, IIJ said it was ready for another try. Its financials for its fiscal second quarter ended Sept. 30 were looking just as strong as the fiscal fourth quarter of last year. So, IIJ won the Tokyo Stock Exchange's OK to list its shares on the exchange's Mothers market. Like last time, it's basing the price of the offering on the listing expected on Dec. 2.

And like last time, IIJ shares leapt in anticipation of the listing, climbing 13% to $11.63 on heavy volume Wednesday after rising as high as $12.58 intraday -- its highest level since the pricing of the first planned Tokyo Stock Exchange listing.

On Thursday, the company's shares had recently given back almost 4% to $11.20.

Just what was the cause of that prepricing surge last May remains something of a mystery. Although it bore many hallmarks of speculative manipulation, and although it's exactly the kind of event that discourages other overseas companies from listing on U.S. exchanges, regulators never gave any hints about what caused the suspiciously erratic trading. A Securities and Exchange Commission spokesman declined to comment on whether there has been an investigation into the trading of IIJ.