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(Reuters) - Shares of two tech companies and a bank holding company blew past expectations in their stock debuts on Wednesday, reviving hope for what had been a sickly market for initial public offerings.
"The market is saying that with the improvement in the economy, tech spending will increase and the capex freeze that has been in place in most small, mid and large companies will likely be withdrawn," said IPO Boutique Senior Managing Partner Scott Sweet.
The success of First Interstate BancSystem shares could signal an opening in the IPO market for banks, he added.
Many IPOs this year have been cut, postponed or canceled as investors shy away from risk in an uncertain market.
Both broadband chipmaker MaxLinear and telecom equipment company Calix Networks surged as much as 38 percent above their IPO prices, while First Interstate rose as much as 13 percent.
The stocks gave up some of their early gains in afternoon trading, but remained sharply higher.
The strong performances came even as major U.S. stock indexes eased off 1 1/2-year highs set on Tuesday.
MaxLinear's chips are used mainly in mobile handsets and in-vehicle entertainment in Japan and in set-top boxes in Europe.
In its Tuesday IPO, the Carlsbad, California-based company sold 6.4 million shares for $14 each, raising $90.2 million. It had planned to sell 5.4 million at $11 to $13.
Petaluma, California-based Calix sells hardware and software that allow communications service providers to network with their residential and business subscribers. It said in a regulatory filing that its competitors included Huawei Technologies and Motorola.
The company on Tuesday sold 6.3 million shares for $13 each, raising $82.3 million. It had planned to price the shares at $11 to $13 each.
First Interstate has about 72 branches in 42 towns and cities in Montana, Wyoming and western South Dakota. The Billings, Montana-based bank sold 10 million shares for $14.50 each, raising $145 million. It had planned to sell 8.7 million at $14 to $16.
In afternoon trading, MaxLinear was up 37.2 percent at $19.21, Calix rose 26.1 percent to $16.39, and First Interstate gained 11.7 percent to $16.20.
Morgan Stanley and Deutsche Bank Securities led MaxLinear's IPO. Underwriters on the Calix offering were led by Goldman Sachs and Morgan Stanley. First Interstate's underwriters were led by Barclays Capital.
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