By Eric Fetters
Herald Writer
BOTHELL — Quinton Cardiology Systems Inc. ended the first day of its initial public offering on the positive side after a last-minute cut in the asking price for its shares.
The Bothell medical equipment maker’s stock stood at $7.19, up 2.7 percent from its introductory price of $7, at Tuesday’s close of the Nasdaq market.
The stock began trading after a week of delays in its expected debut and significant reductions in the asking price. Quinton originally hoped to get $13 to $15 a share. Last week, the company lowered the asking price to the range of $8 to $10. Late Monday, Quinton lowered the bar again to $7.
"The fact that it was cut 50 percent saved the deal," said David Menlow, president of IPOfinancial.com.
"It was very clear that the offering had a negative bias to it. There had been a number of problems with the offering and the company," Menlow said.
He points to Quinton’s recent history. Since American Home Products sold it to an investment group led by W.R. Hambrecht &Co., the 49-year-old company has not shown a profit. Last year, it reported a loss of $7.2 million.
Quinton, which specializes in heart monitoring, diagnostic and rehabilitation equipment, also has faced other obstacles. A fight over distribution of its products resulted in a pending lawsuit against Zymed Inc., one of the Quinton’s largest stockholders behind W.R. Hambrecht, which owns about 45 percent of the company.
But Adams, Harkness &Hill Inc., the lead underwriter for Quinton’s share offering, has a successful record in IPOs. The firm’s strategic handling of the transaction and the cut in the asking price could help the stock succeed in the long run, Menlow said.
Proceeds from Quinton’s offering of 4 million shares could total $24 million. The company plans to use the money for more research and development efforts, to expand international sales and to cover general corporate expenses, according to the company.
Quinton is only the second Puget Sound-area firm to go public in 2002, following a year that saw just three Washington companies go public.
Scott Smallman, an analyst with US Bancorp Piper Jaffray’s Seattle office, said as long as the market remains down and investors stay scared, it’s not a welcoming climate for most companies.
In recent weeks, several candidates have postponed their IPOs because of rough market conditions.
"It’s going to be a light year for IPOs unless the market gets zipping again," Smallman said.
You can call Herald Writer Eric Fetters at 425-339-3453 or send e-mail to fetters@heraldnet.com.
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