Blue Nile Shares Take Off After IPO – Close 60% Higher

Shares in newly floated online jeweler Blue Nile Inc took off on their debut on the Nasdaq exchange and closed on Friday at $32.82 - 60 percent above their initial public offering price of $20.50.

The Seattle-based firm, which floated last Wednesday, raised its IPO price after initially settling on a price range of $17.50 to $19.50. It was the first IPO in two years in the retail sector to be priced above its estimated range.

The share jumped almost 38 percent on its first day of trading – about three times the average IPO first-day gain, which is around 12 or 13 percent.

Washington-based Blue Nile reported 2003 revenue of $128.9 million and net income of $27 million. In the first quarter of 2004, it reported revenue of $35.8 million and net income of $1.9 million.

"Blue Nile has been profitable since 2002 and has generated positive cash flow from operations for the past three years," said an IPOHome.com report. "While sales growth will be more moderate going forward as Amazon and others move into its space, it is still capable of growing more than 20 percent per year and operating leverage should continue."

Blue Nile offers more than 30,000 certified diamonds and more than 1,000 styles of jewelry, such as rings, wedding bands, earrings, bracelets and watches on their web site.

It said the cash raised would be used for general corporate purposes, including working capital and capital expenditures, and possible investments in securities. It does not intend to acquire other businesses or technologies.