NEW YORK -- AT&T; Wireless Group's shares rose 7.8 percent yesterday after the biggest-ever U.S. initial stock sale as investors bet that the unit of the No. 1 long-distance company will benefit from surging cell phone use.
The AT&T; Corp. division gained $2.3125 to $31.8125 on the New York Stock Exchange, giving it a market value of $73.5 billion.
While the $10.6 billion IPO raised $900 million less than underwriters at Goldman Sachs Group Inc., Merrill Lynch & Co., and Salomon Smith Barney had initially hoped, buyers said they were attracted by the company's position as the No. 3 wireless service, its brand name and the industry's rapid growth.
"I like the idea of having another nationwide carrier to invest in," said Bern Fleming, a fund manager at American Express Financial Advisors in Minneapolis who said he bought shares in the IPO. "I don't have to have so much in just a few names" such as Sprint Corp.'s wireless unit and Nextel, he said.
More than 137 million of the tracking shares -- which give an economic but not an ownership interest -- were traded, making AT&T; Wireless the most actively traded issue. They were sold for $29.50 each, the middle of a selling range of $26 to $32.
The tracking shares let AT&T; maintain control while permitting investors to value the unit as a separate entity. The securities have grown popular as phone companies move into emerging businesses such as wireless and cable television, whose high expenses can weigh on profit.
AT&T; Wireless' first-day gain pales in comparison to the average 81 percent ascent of this year's 29 telecommunications-related IPOs, as measured by CommScan LLC. The rise is less than the 37 percent first-day gain posted by United Parcel Service Inc., which completed the second-largest IPO in the fall, or the 33 percent gain by Goldman Sachs, which went public in the fourth-largest IPO in May.