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October 28, 1999

JNI and InterTrust Stage Bullish Market Debuts

By CBR Staff Writer

Network equipment manufacturer, JNI Corp and InterTrust Technologies Corp, a digital content management software vendor, doubled and tripled their share prices, respectively, after staging initial public offerings on Nasdaq, Wednesday.

JNI’s shares soared to close out Wednesday at $42 from a $19 offer price when the market opened. And the upward trajectory continued on Thursday with the price rising 6.55% to $44.75, late in the day. San Diego, California-based JNI, formerly Jaycor Networks, makes fibre channel host bus adapters for storage area networks (SANs). The firm also makes fibre channel controller chips and SAN configuration and monitoring software. The company, which began as a unit of diversified technology company, Jaymark Inc, sells its products through distributors and directly to manufacturers, including EMC Corp, Compaq Computer Corp and LSI Logic Inc. Other customers include Inc, EBay and brokerage firm Charles Schwab.

JNI raised $93.1m from the IPO, which involved 4.9 million shares. The sale accounted for a 22% stake in JNI, almost half of which was sold by principle shareholder, former parent company, Jaymark, which is left with a 71% holding. The firm is an oddity among newly-public IT companies in that it is profitable. JNI turned an operating profit of $1.4m, or 2 cents a share, on revenue of $10.9m for its third quarter ended September 30. The SAN technology market in which the firm competes is expected to grow to $23bn by 2002 from $2bn last year, according to figures from industry watcher, International Data Corp.

Sunnyvale, California-based InterTrust leapt to $54.37 from an opening share price of $18. The shares slunk back slightly in trading, Thursday, to close at $53.06. InterTrust’s software and services enable firms to provide a secure method of delivering digital content, particularly online music. Buyers can open the content files, but the software ensures material remains packaged in DigiBoxes to limit distribution. The firm’s client roster includes the music operations of Universal Studios. It posted a net loss of $19.7m for the 1998 fiscal year to December 30. Intertrust netted $117m from Wednesday’s IPO of 6.5 million shares at $18 a piece. The sell-off accounted for 17% of the company.

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