Jamdat's big day on the Street

Jamdat Mobile, an LA-based mobile applications company, reported unexpectedly strong day one results from Wall Street today. The company raised approximately $61 million from an initial public offering of 5.5 million shares of stock.

Jamdat shares closed at $22.51 after active trading on the Nasdaq. Reportedly, almost 7 million shares traded hands today. The closing price represented an increase of over 40 percent based on the initial pricing of $16 per share. Such endorsement from the investment community strongly suggests the mobile gaming market may be attracting more than just venture capitalists.

Jamdat had planned to sell only 5.3 million shares of stock at $13 to $15 per share; instead, it allocated additional shares after demand proved heavier than anticipated. The IPO was underwritten by Lehman Brothers, Merrill Lynch & Co, and UBS Investment Bank.

The company has benefited from its early start and carrier associations solidified by company CEO Mitch Lasky. "Jamdat was an early leader in wireless games, and while the industry tends to undervalue games' potential, carriers such as Verizon and Sprint have done very well with games as an additional revenue stream," said Billy Pidgeon, a senior analyst with the Zelos Group and an expert on the wireless market.

Jamdat Mobile is primarily known for developing and publishing games for cell phones, such as its popular Jamdat Bowling games, Neverwinter Nights, and Jamdat Sports NFL 2005. Earlier this summer when the company said it intended to go public, the news was greeted with mixed reactions; calendar Q1 of 2004 was the 4-year-old company's first profitable quarter. Jamdat had posted a loss of $4.3 million on $4.2 million in revenue over the first half of 2003.

Can Jamdat capitalize on its success today? Says Pidgeon: ”There is still huge unrealized potential in wireless games, and Jamdat is poised to continue to lead in the sector.”