Mitel IPO Disappoints in First Day on Nasdaq

Shares of Mitel Networks (MITL) had plunged more than 9 percent by about noon Eastern as the communications networking gear-maker debuted in a disappointing IPO.

Mitel finally hit Wall Street after shelving initial public offering plans in 2006 due to a souring economy.

Mitel, based in Canada, has worked since last December toward its IPO goal. But on Wednesday night, the company priced shares below expectations – $14 each – and raised $147.4 million. Analysts had expected a price tag of $18 to $20 per share and a $200 million total.

One of the reasons Mitel could be having a hard time is that seven companies planned IPOs for today. That’s a good sign in terms of renewed investor interest, but Mitel likely took the deepest hit in accepting lower share-sale numbers because it sought the most money.

Mitel was founded in 1973 by Terence Matthews. He lost control of his company years later but bought back that ownership in 2001. Since then, Mitel has cut jobs, had a nasty patent dispute with ShoreTel, bought rival Inter-Tel in 2007, and cranked out new products, including mobile voice and data service. The company lost $193 million during its fiscal year 2009 but returned to profitability in the three months ended January with $33.2 million in income.

Still, Mitel’s activity on the Nasdaq Thursday was spotty. At 12:13 p.m. Eastern, its shares were trading for $12.70, down 9.29 percent.