NEW YORK (AP) -- Shares of Boise Cascade are up more than 24 percent in their first day of trading, a sign that the market for initial public offerings may be thawing.
Such trading for the maker of wood products and building materials comes as the housing market continues to show signs of a recovery. Improvements in the job market and the overall economy, coupled with low interest rates, appear to be boosting demand for homes.
Boise Cascade Co. supplies about 4,500 wholesalers, home improvement centers, retail lumberyards and other customers with laminated wood veneer, plywood and other construction materials. Office supply chain OfficeMax Inc. owns about 20 percent of the Boise, Idaho company.
Boise Cascade's stock gained $5.05, or 24.1 percent, to $26.05 in Wednesday midday trading while the broader markets edged lower.
The strength of Boise Cascade's IPO as well as those of companies like Zoetis, may be a sign that the IPO market is gaining traction this year.
Zoetis, Pfizer's animal health business, surged in its trading debut on Friday after its IPO of 86.1 million shares raised $2.2 billion — the largest IPO by a U.S. company since Facebook Inc. raised $16 billion last May.
John Fitzgibbon, founder of IPOScoop.com, said in an interview with The Associated Press that the IPO market is stronger than many people realize. While investors may be heading toward IPOs like Boise Cascade because of the ongoing housing market recovery or Zoetis because of its growth potential, Fitzgibbon says that IPO activity is also closely linked to the broader market.
"If you have a good stock market it will spill into the IPOs," he said.
The Dow Jones industrial average broke 14,000 on Friday and closed at its highest level since the financial crisis. The Dow is a stock market index that is traditionally considered a benchmark for how the entire market is faring.
Boise Cascade raised $247.1 million in its initial public offering of stock, which was more than it expected.
The company said late Tuesday it sold 11.8 million shares for $21 each. It had initially set a price range of $16 to $18, and raised that to $18 to $20 on Tuesday, signaling better-than-expected demand from investors. The banks managing the offering may buy another 1.8 million shares if there's demand, adding $37.1 million to the proceeds.
The company plans to use $25 million to repay debt and the rest for general corporate purposes.
Boise Cascade expects to post a profit of $39.2 million to $43.2 million in 2012, compared with a loss of $46.4 million the year before. It predicts that revenue rose by nearly a quarter, to a range of $2.77 billion to $2.79 billion from $2.25 billion.
The stock is listed under the "BCC" ticker symbol on the New York Stock Exchange.
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