(Reuters) - Investors tuned in to shares of customized television programming service TiVo Inc., which more than doubled their initial public offering price Thursday after soaring 162 percent at the open.
The Sunnyvale, Calif.,-based company priced 5.5 million shares at $16 a share in its IPO -- up from the expected price of $11 to $13 per share -- through lead underwriter Credit Suisse First Boston.
The stock opened Thursday at $42 -- 162 percent above the offering price.
By the close of Nasdaq trading, TiVo shares were at $29-15/16, up $13-15/16 from their IPO price.
``It zoomed out of the gate and is giving it all back. ... I thought it would have more strength,'' said Irv DeGraw, research director at WorldFinanceNet.com.
``TiVo's problem is that they have such a complicated story to tell and they do not do a good job of telling it,'' DeGraw added. ``If this were a straightforward, pure play story, it would be much easier to value these guys.''
TiVo is a subscription-based service that allows users to customize programming. The device works somewhat like a ''smart'' video cassette recorder, using a computer disk instead of a videocassette to record shows. Viewers are able to pause live broadcasts, create a personal menu of shows, fast-forward through commercials and record programs with a particular theme or actor.
Bruce Kasrel, senior analyst at Forrester Research in Cambridge, Mass., said, ``This is not an Internet stock, per se, it's a TV stock, which is a little less exciting to the Wall Streeters and the day traders of the world.
``The consumer electronics industry is a tough business but there are 98 million households with television sets, and only 50 million with PCs,'' Kasrel added.
TiVo has strategic relationships with America Online Inc. and electronics giant Sony Corp. Although TiVo's personal video recorder, or PVR, is still somewhat exotic, analysts expect such products to change the television landscape.
``TiVo is really at the forefront of where TV is going,'' said Tom Taulli, senior analyst at Internet.com. ``The interactivity gives you full control over it, so I think investors are excited about that.''