Stock in USinternetworking Inc., an Annapolis company that offers business software over the Internet, surged nearly 45 percent yesterday, a jump some analysts attributed to growing investor comfort with the young operation.
The company's stock closed on the Nasdaq stock market yesterday at $27.625, an increase of $8.50.
Analysts were somewhat puzzled by the sudden increase, but were quick to note that USinternetworking is in a market segment -- Internet-related companies -- in which sudden surges and retreats have become the norm.
Roy Lobo, an analyst for Moors & Cabot/Dakin, attributed the jump to signs that the company's management is controlling expenses and landing stable customers. USinternetworking reported an operating loss last quarter, but has told analysts that revenue is growing at a healthy pace.
"Nobody forecasted this eight-point move, but people certainly have thought the stock has stabilized and that growth of the company is there," Lobo said.
"I don't think anyone discounts the fact that the company is in a very hot space and is a leader in that space," he said.
Todd Weller, an analyst for Legg Mason Wood Walker in Baltimore, said stock in USinternetworking also likely benefited from a few similar companies that received favorable reports yesterday from industry heavyweight Credit Suisse First Boston. AppNet Systems Inc. and Viant Corp. both recorded large stock jumps after Credit Suisse rated them "strong buys."
"There's no fundamental news out there that would cause it to spike like that," said Weller.
"In the grand scheme of things, it's still not that huge. We've seen it [drop] four or five points, too."
Indeed, yesterday's increase was the latest bump in a wild ride that has seen USinternetworking trade as high as $57.50 and as low as $14.3125 over a span of just five months.
The company stormed onto the Nasdaq on April 9 with a spectacular initial public offering during which its share price nearly tripled.
USinternetworking buys licenses for business management software and lets companies access the software over the Internet for a monthly fee.
It reported a second-quarter net loss of $23.6 million, or 66 cents per share.