Digital Theater Systems
is on track to be the best-performing first-day IPO gainer of the year.
Shares of the digital audio company were up $6.35, or 37.4%, at $23.33 on their debut of trading -- a bullish sign for the slowly reviving new-issues market. The stock has so far surpassed
, which had been in the lead for initial-day performances this year, according to Thomson Financial. It rose 27.5% on its first day of trading.
Digital Theater sold 3.84 million shares at $17 a share, above a previously expected range, for $65.3 million. The lead underwriter was SG Cowen, with William Blair and Thomas Weisel as co-managers.
During the first quarter, Digital Theater earned $1.6 million, compared with $1 million in the year-ago period. Revenue rose to $11.8 million from $9.4 million in the same quarter last year.
"In order to succeed in today's market, you have got to be profitable," said Jeffrey Hirschkorn, a senior analyst at
. "This company fits into that model."
Digital Theater is the fifth IPO to price in the past three weeks, following
American Financial Realty
. Each of those stocks is above its opening level, as investors have begun to embrace IPOs again.