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Infineon blazes ahead
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March 13, 2000: 6:42 a.m. ET
Chipmaker's stock doubles on first day, valuing Siemens unit at $48 billion
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LONDON (CNNfn) - Shares in German chipmaker Infineon Technologies soared as high as 85 euros on the Frankfurt stock exchange Monday, more than double their sale price, on the first day of trading after an initial public offering that attracted orders for 33 times as many shares as were available.
Infineon's owner, German industrial company Siemens, sold the shares for 35 euros each, at the very top of the 29-35 euro range indicated ahead of the sale. The stock started trading at 70.2 euros before rising still higher despite a declining German stock market. The shares recently traded at 80 euros.
Siemens offered about 174 million Infineon (FIFX) shares, or 29 percent of the company. The jump in the stock's value means the chip company is worth about 50 million euros ($48 billion) as a whole.
The public share offer was the second-biggest ever in Germany, behind Deutsche Telekom's 10 billion-euro IPO in 1996.
Traders said Infineon might replace Dresdner Bank (FDRB) in the Dax index once Deutsche Bank's (FDBK) takeover of Dresdner is complete.
Infineon, the world's tenth-largest chipmaker based on last year's sales, said that around 60 percent of the shares sold were placed with institutional investors worldwide and 40 percent bought by individual investors in Germany.
Siemens has radically restructured its diverse portfolio of activities. The part-sale of Infineon is the second successful IPO of one of its subsidiaries. The company last year listed shares in electronic components maker Epcos (FEPC). The surging share price performance of the former joint venture with Matsushita led to the firm being included in the Dax index in February.
The success of Siemens restructuring has unlocked enormous value from its technology subsidiaries, fueling a massive advance in one of Germany's bluest chips. Siemens (FSIE) retreated 6 percent Monday as investors locked in some of their recent gains.
In the financial year ended September 1999 Infineon generated revenue of 4.2 billion euros, up 33 percent on the prior year, and posted an operating loss of 64 million euros, although that was an improvement on the loss, before one-time items, of 680 million euros in 1998. In the first quarter of the current financial year the firm reported an 81 percent surge in revenue to 1.54 billion euros. 
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