UPDATE 2: Melbourne IT floats to the top

Domain name registry Melbourne IT has had a spectacular listing on the ASX, opening at $8.209, almost four times its issue price of $2.20.

Within the first few minutes of trade the shares climbed to $9.10, and around 1.67 million shares had changed hands.

Melbourne IT CEO Peter Gerrand said he believed the high level of interest in the float was stimulated by the company's "liberation" from Melbourne University, and recent positive financial results.

Earlier this week the company revealed that it had out-performed its prospectus forecast by registering 19,600 new domain names in November, a figure expected to rise to 20,000 this month, in contrast to its prospectus forecast of 12,000 on average each month.

As a result, the company said it expected earnings before interest and tax (EBIT) for the year ending 31 December 1999 would exceed the prospectus forecast of $670,000.

Gerrand also said the success of the float was due to the fact that Melbourne IT was the first Internet company JB Were chose to take to market.

Gerrand said his next step would be to establish the company internationally.

"Now that we have developed the company into one which is of national significance, the next step is to build it to a level of international significance," Gerrand said.

Responding to concerns that the company would be ripe for a takeover bid after selling 85 per cent of its equity through the listing, Gerrand said he was less worried about the prospect of a takeover today, then he was if the price of the stock had remained closer to the three dollar mark.

"Due to the strength of the share price I think there would be a number of players who would come into the market to prevent that [a takeover] happening. I think basically the broad range of institutions interested in the company can see a long-term future for a return on their investment," Gerrand said.

By the end of the day's trading, after almost 12 million shares had changed hands, Melbourne IT closed at $7.95.

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