NEW YORK -- Shares of AT&T's wireless business began trading today, with bidders pricing the stock at slightly above the price set in advance in the biggest initial public offering in U.S. history.
The stock didn't fly to the sky like an IPO in the good old days of IPOs -- just months ago -- but at least Ma Bell found enough buyers to sell a mammoth $10 billion worth of stock.
The initial price for the IPO, $29.50, was announced Wednesday evening. In early trading on the New York Stock Exchange, where AT&T executives rang the opening bell, the stock rose as high as $31.87' before pulling back to $31.43 3/4 at midday.
The positive start, however, did little to distract a jittery stock market, which grimaced at a new report adding to inflation and interest rate worries.
Despite concerns that Wall Street's foul mood might derail the IPO, AT&T announced late Wednesday that it was selling 360 million shares for a total of $10.26 billion.
Although the IPO failed to come in at the high end of the $26 to $32 range proposed by AT&T, analysts said it was encouraging, in the faded environment for IPOs, that the stock didn't sell at the lower end of the price range.
Whether or not the stock shows some staying power will say something about whether investors are getting over their fright after weeks of steep declines.
The IPO was proposed in December, when investors seemed to crave businesses that can provide a wireless link to the Internet and IPOs often opened in spectacular fashion.
On Dec. 9, VA Linux Systems Inc., a leading provider of servers and workstations designed to work with the Linux operating system, soared 733 percent in initial trading, setting a record for the best-first day performance. The company offered 4.4 million shares at an initial price of $30 per share, and the price immediately jumped to $299 on the Nasdaq Stock Market. It closed at $250 a share that day.
But in recent weeks, worries about when profits might materialize have prompted a steep selloff that has beaten down high-flying share prices. VA Linux is now trading below $40 a share. And companies such AltaVista have postponed their IPOs, fearing the current atmosphere will deprive them of a big payday.