Mips Technologies floated on the Nasdaq stock exchange this week, but response to its offering was disappointing.
The company, formerly a subsidiary of Silicon Graphics, was initially offered to the market at $14 and opened at just over $15 per share. But by the close of play yesterday, shares in the newly fledged outfit had fallen to just over $13 per share, with the day's low standing at $12.
The original plan was to offer 6.3 million shares, but this was scaled down to 5.5 million because of lack of demand from large institutions. Of those, 4.25 million were offered by SGI, and the remainder by Mips itself.
SGI, which retains an 85 per cent stake in Mips, will be disappointed by the offering. It had spun off the unit to concentrate on what it considers to be its core business, Intel based servers.
However, despite the poor response to the flotation, most analysts believe the company, which makes Risc chips, has a sound future. Its processors are used not only in games platforms such as Nintendo machines, but in embedded architectures - although they have fallen back in the world of workstation and server platforms, losing out to Intel, Hewlett Packard, Digital and Sun.
Tandem was formerly a user of Mips processors but after its acquisition by Compaq last year, it decided to drop the processor in favour of x.86 and Digital Alpha processors. However, the company said sales to Tandem, its main OEM in the server world, only amounted for a small percentage of sales.
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