IRobot shares jump 11.25% in trading debut

With its PackBot becoming the first robot to ring the opening bell at the Nasdaq Stock Market in New York yesterday, Burlington's iRobot Corp. made its debut as a public company and shot up 11.25 percent for the day.

Shares of iRobot climbed $2.70 to $26.70 from their opening price of $24. The company and its insiders sold 4.3 million shares on Tuesday, in an initial public offering seen as a test of the appeal of robotics to investors. The company said its share of the offering was about $72 million, and yesterday's trading gave it a market value of $621.8 million.

Colin Angle, iRobot's cofounder and chief executive, said in an interview that the money raised in the company's stock sale would be used as ''strategic capital" to scout out acquisitions.

Angle said the IPO succeeded because ''we were able to convey to potential investors that the age of practical robots is upon us."

With the company's Roomba vacuum cleaning robots now in about 1 percent of American households, there is plenty of room for growth both here and abroad, he said. ''These robots are not gadgets for the digerati," Angle said. ''They're serious household appliances."

Sales of household robots like Roomba and the new Scooba floor washing robot now make up two-thirds of iRobot's revenue, but military robots, which account for the other third, are a faster-growing segment. One of its military robots, a PackBot EOD (explosive ordinance disposal) model used to defuse roadside bombs in Iraq, was equipped with six-foot-arm to ring the Nasdaq bell yesterday morning.

Demand for the stock was heavy enough to prompt iRobot to boost its offering price to $24 a share, from the $21 to $23 it proposed in its IPO registration statement. The shares surged as high as $34.16 in midday trading. IRobot sold 3.3 million shares, and the rest came from company insiders, who also agreed to give the underwriting banks the option to purchase another 645,000 of their shares.

Some market watchers were surprised by iRobot's debut performance. ''A lot of people didn't expect a robotics IPO would do so well," said Eliot Menendez, analyst for Informa Global Markets, an independent research firm in New York. ''It could be a first-day spike that will level off in the next couple of weeks. The long-term prospects for the company will depend on the financials."

The next six weeks loom large, as iRobot steps up an advertising campaign aimed at making its household robots hot gifts for the holiday season.

''The IPO is important as a marketing event," said Newport Coast, Calif., investment adviser Tom Taulli, a corporate finance professor at the University of Southern California's Marshall School.

''We won't know whether this is a tipping point for robotics till the end of December. My gut tells me it's too early," Taulli said. ''But for a momentum investor looking for a quick buck, this could be a stock to play."

Angle, for his part, cited a study by the European research firm Future Horizons, which forecasts a $40 billion global market for service robots by 2010. IRobot is scrambling for a big share. ''We are certainly not done as far as products and markets go," he said.

Robert Weisman can be reached at weisman@globe.com.