AP

Neutral Tandem Shares Spike After IPO

Friday November 2, 3:40 pm ET

Neutral Tandem Shares Spike More Than 40 Percent in First Day of Trading for Telecom Company

NEW YORK (AP) -- Shares of Neutral Tandem Inc., which provides services that connect phone networks between providers, surged 45 percent in their first day of trading Friday after the company's initial public offering priced above expectations.
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Neutral Tandem's IPO of 6.7 million shares priced at $14 per share, above the anticipated range of $11 to $13 per share.

In afternoon trading, shares spiked $6.30, or 45 percent, to $20.30. After opening at $18, 29 percent above the offering price, the stock has traded as high as $20.49.

If the shares continue trading near the current price, Neutral Tandem's IPO will rank among the top deals of the week.

On Tuesday, Genoptix Inc. shares climbed 50 percent in their first day of trading after the diagnostic services provider's IPO priced at $17 per share.

And the American Depositary Shares of CNinsure Inc. jumped 58 percent in their market debut Wednesday, after the Chinese insurance agency and brokerage's IPO priced at $16 per share.

Neutral Tandem, whose IPO is the last to price this week, serves wireless, wireline, cable telephony and Voice over Internet Protocol companies. The company's network carries about 3.4 billion minutes of traffic per month and can serve about 201 million assigned telephone numbers.

The Chicago-based company offered about 6.3 million shares, and a group of stockholders sold the remaining 400,000. Neutral Tandem plans to use the net proceeds from its portion of the IPO to expand its business.

The offering is expected to close on or about Wednesday.

Morgan Stanley was the IPO's lead underwriter, and CIBC World Markets served as co-lead manager. Raymond James & Associates, Thomas Weisel Partners and William Blair & Co. also served as underwriters.

The underwriters have an option to buy nearly 1 million shares from the company to cover any overallotments.

Neutral Tandem shares are listed on the Nasdaq Stock Market under the symbol "TNDM."