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Successful Netgear IPO Shows No Place Like Home (Networks); Company's Shares Rise 26%.(INTERNET & TECHNOLOGY)

Investor's Business Daily

| August 01, 2003 | COPYRIGHT 2003 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: MIKE ANGELL

Investors on Thursday aimed to cash in on the home and small-office networking trend by snapping up shares in gear maker Netgear Inc.

The Santa Clara, Calif.-based company raised $98 million in its initial public offering of 7 million shares at $14 a share. The stock rose 26% its first day to close at 17.69, giving the company a market value of more than $480 million.

Netgear products can link together two to 48 computers and printers. There's a growing need for its products as more homes get fast Internet connections and more small businesses get computers. But it's a tough market, with intense price competition for fickle consumers.

"Demand is coming around, but there are way too many players," said Michael Greeson, an analyst with home networking research firm Parks Associates.

Though newly minted as a public company, Netgear's roots are in an old hand in the networking game. Netgear started life in 1996 as a unit of Bay Networks.

Canada's Nortel Networks Corp. bought Bay in 1998. But Nortel sold Netgear to outside investors, opting to focus on big-business customers.

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