, an Internet service and content provider, attracted relatively modest investor interest Wednesday in its stock market debut, despite its close ties to
Shares of Telocity rose 2 1/8, or 18%, to 14 1/8 in its first hours of trading. (Telocity shares closed up 1 1/4, or 10%, at 13 1/4).
underwrote Telocity's initial public offering of 11 million shares at $12 apiece, bringing in $132 million. The stock was priced at the high end of the initial range of $10 to $12, but was not so much in demand to rise above the range as many of its IPO predecessors have done.
Telocity, based in Cupertino, Calif., provides high-speed Internet access and content to homes through high-speed connections. The company offers services to 6,500 customers in more than 50 metropolitan areas in the Southeast, Northeast, upper Midwest and Mid-Atlantic states, including Miami, Atlanta, Detroit, Philadelphia and New York.
Revenues, mostly from monthly subscriptions, increased from nothing in 1998 to $187,000 in 1999, while losses increased from $7.4 million to $42.1 million over the same period.
The strength of the Telocity comes from its relationship with
, the TV network owned by
. Through a recent set of agreements,
, or NBCi, provides all of the content on its jointly developed Web site the Telocity/NBCi portal.
Telocity expects to eventually earn revenue from an advertising- and revenue-sharing agreement with NBCi. The advertising agreements will give Telocity $28 million of promotional time on the NBC television network by 2003. NBCi also agreed not to televise ads for any of Telocity's competitors until the end of 2002.
An operating agreement with NBCi also guarantees that by December, NBCi will provide Telocity with online advertising of its services valued at $5 million, according to the company's filing with the
Securities and Exchange Commission