Opnext IPO Has Lots of Bandwidth

Hitachi spinoff closes well above IPO price on opening day

February 16, 2007

2 Min Read
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Components firm Opnext proved that not only pure-play storage companies can have successful IPOs when it went public today and closed at more than 15 percent above its opening price. (See Opnext Prices IPO.)

Opnext is more fiber optics than Fibre Channel, but its transceiver modules show up in storage-related Sonet and DWDM products. (See Stretching SANs.) Its focus on 10 Gbit/s and higher speeds could make it more of a storage play if 10-gig becomes the driver for iSCSI SANs that some expect it to be. (See The iSCSI Subtext to 10-GigE.) Its largest customers include companies that at least dabble in storage, such as Cisco, Ciena, Fujitsu, and Hitachi, which founded Opnext and spun it off.

Opnext's stock price is behaving like recent storage IPOs on their first days as public companies -- CommVault, DoubleTake, Isilon, Mellanox, and Riverbed all met the high range or exceeded their target prices. (See Mellanox Exceeds IPO Hopes, Double-Take, Isilon Go Public, CommVault Swims in Public Pool, and Riverbed Comes Out at $9.75.) After Opnext secured an IPO price at the high end of its target range at $15, its price rose to $17 when trading began today and closed at $17.32 -- 15.5 percent above its IPO price.

Besides paying off short-term loans, Opnext's SEC filings said it will use part of the $254 million raised in the IPO for product development and will also look to acquire or invest in companies that complement its business. (See Opnext Unveils IPO Details.)

Other storage vendors considering IPOs will pay attention, as they did when CommVault, DoubleTake, Isilon, Mellanox, and Riverbed went public during the past year.The same goes for EMC, which plans to spin off 10 percent of the shares of VMware later this year. (See VMware to Spin Out.) Hitachi spun off Opnext from its components group in 2000 and eventually brought in venture capital partners. Hitachi still owns 46 percent of Opnext, compared to 68 percent before the IPO.

Opnext, based in Eatontown, N.J., reported sales of $61.7 million and net income of $3.2 million for the fourth quarter of 2006 compared to $38.6 million in sales and a loss of $4.1 million the previous year.

Dave Raffo, News Editor, Byte and Switch

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • CommVault Systems Inc.

  • Double-Take Software Inc. (Nasdaq: DBTK)

  • EMC Corp. (NYSE: EMC)

  • Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY)

  • Hitachi Ltd. (NYSE: HIT; Paris: PHA)

  • Isilon Systems Inc. (Nasdaq: ISLN)

  • Mellanox Technologies Ltd. (Nasdaq: MLNX)

  • Opnext Inc. (Nasdaq: OPXT)

  • Riverbed Technology Inc. (Nasdaq: RVBD)

  • VMware Inc.

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