The 1990s will be over in 70 days, but the decade's cash-happy, technology-obsessed spirit shows no sign of dying. Yesterday, yet another high-technology company went public and made a serious boatload of money.
The latest grabber of the brass ring: Aether Systems Inc. of Owings Mills. The 3-year-old wireless data company saw its shares more than triple in value -- from $16 to a close of $48.4375 on the Nasdaq market. Thanks to this steep rise, Aether now has a market value of $1.26 billion.
Aether's an experienced money-loser -- it has ended in the red in each of its first three years of existence and was $4.3 million down for the first six months of this year -- but such hemorrhaging has hardly deterred the high-tech investment frenzy.
In the past few years, Internet-related companies such as Amazon.com Inc. and DoubleClick Inc. have gone public and seen their shares rise astronomically -- without ever having a profitable quarter.
Aether caught investors' attention by planting itself squarely at the intersection of two white-hot technologies: wireless communications and data transmission. The company sells systems and services that allow Palm Pilots and other hand-held devices to carry up-to-the-second financial information and other news.
Along the way, Aether has made some important friends.
In February, the company forged a partnership with Reuters America Inc. to beam stock information. Last month, Aether won a two-year contract to provide data communications systems for financial-services giant Charles Schwab & Co. Inc. In addition, Aether has combined with Palm Pilot maker 3Com Corp. to form OpenSky, a wireless Internet company.
Mark Lowenstein, a wireless-communications analyst for the Yankee Group in Boston, said he was "not surprised at all" by Aether's prosperous first day of trading.
"Aether fills some important gaps in this wireless [industry]," said Lowenstein. "They're very focused on solutions to help corporate customers with mobile data." Lowenstein said Aether's market momentum yesterday was helped by the success of another company that sends data to mobile users, Phone.com Inc., which has seen its shares rise nearly 15-fold since its June public offering price of $16.
Aether sold 6 million shares at the opening price of $16, bringing in $96 million.
Of that amount, $6.7 million was used to pay the offering costs, and $14.8 million is to be used to repay debts, including expenses incurred in the August, $12.5 million purchase of Bethesda-based Mobeo Inc.
One happy man was Aether Chief Operating Officer George M. Davis, whose 175,000 shares in the company grew in value from $2.8 million to $8.5 million yesterday.