(Reuters) - Shares of Audience Inc, which makes chips used in Apple Inc’s iPhone, rose in debut, underlining investors’ appetite for technology stocks in a weak IPO market.
Audience sells its products, which improve the voice quality in mobile devices by filtering out background noise, to Apple’s contract manufacturers like Foxconn International Holdings Ltd and Protek Ltd.
“It is an emotional spill-over effect ... people are anticipating significant revenue from its links with the iPhone,” Francis Gaskins, president of IPO research site IPOdesktop.com said.
Audience, which is backed by New Enterprise Associates, Vulcan Capital and Tallwood Venture Capital, relies on Apple and Samsung Electronics Co for the bulk of its revenue.
The Mountain View, California-based company, had priced its shares at $17 each, above its expected range of between $14 and $16.
Shares of the company, which has sold over 160 million chips since it began shipping in 2008, were up 13 percent at $19.25 in afternoon trade on the Nasdaq.
Technology IPOs have performed well so far this year, with the sector boasting of a significant 29 percent average first day return, according to IPO research firm Renaissance Capital.
“It’s a continuation of the trend of technology companies showing high top line growth, increasing profits, low debts and brand name ... and that has been the winning ingredient for the IPO participants,” Scott Sweet, senior managing partner at IPO research firm IPO Boutique said.
Another market entrant, Western Asset Mortgage Capital Corp, a real estate investment trust, failed to garner enough investor interest in its market debut. Its shares were trading flat at $18.65 on the New York Stock Exchange.
Reporting by Ashutosh Pandey and Aman Shah in Bangalore; Editing by Supriya Kurane