A $10 billion IPO party

AT&T WIRELESS makes a splashy debut, ending the day the fifth most actively traded stock in history and a couple of bucks higher to boot.

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Pictures from the largest initial public offering in history:

Balloons etched with the company's ticker symbol, AWE; a makeshift podium to mirror the one at the New York Stock Exchange; a comedian who entertained workers at the Redmond headquarters.

Oh yes, there was the business at hand: Shares in AT&T Wireless Group, a company with roots in the Craig McCaw empire, sold publicly for the first time yesterday, rising 7.8 percent on the New York Stock Exchange.

Traded after months of investor anticipation and amid stock market volatility, the shares closed at $31.813, up $2.313. The shares are being traded as a tracking stock, which does not represent actual ownership by shareholders but reflects the economic performance of a business unit within parent AT&T.

With about 137.5 million shares exchanged, it was the most actively traded stock yesterday and the fifth most actively traded stock in history.

At yesterday's closing price, the stock now has a market capitalization of about $72.5 billion, exceeding competitors Sprint PCS and Nextel Communications.

On Wednesday evening, AT&T had priced 360 million shares at $29.50, about the midpoint of the pricing range of $26 to $32 a share.

The amount raised $10.6 billion for AT&T Wireless, which plans to use it for network expansion, acquisitions and other purposes.

The IPO handily beat the $5.5 billion raised by United Parcel Service in its IPO in November.

"The general rule of thumb is that large deals tend to do well," said an investment banker whose company participated in the IPO. "When you do a $10 billion deal, you have to have a lot of institutional deals to get interest. It's such a humongous, humongous deal. I'm sure they're very, very happy (at AT&T)."

AT&T Chairman Michael Armstrong and AT&T Wireless Chief Executive John Zeglis basked in the glow, granting interviews throughout the day. They headed a group of 12 Wireless Group employees who stood on the NYSE podium as the opening and closing bell rang.

"Given the volatility of the marketplace, this is a terrific resounding vote of confidence by the investment community," said Mohan Gyani, head of the group's wireless services, from New York.

But, as expected, AT&T Wireless stock did not experience the kind of first-day ascent other Internet or telecommunications IPOs have had. Analysts say the cooling of tech stocks, the relative maturity of AT&T Wireless' business and its tracking-stock status combined for the muted performance.

"I'm not a big fan of tracking stocks," said Safeco Northwest Fund's Bill Whitlow. "You don't really own the company, and there's no call on the assets of the company."

Despite the market volatility, Gyani said the company never considered delaying or suspending the IPO.

Locally, AT&T Wireless employees, many of whom worked for the company before AT&T acquired it from McCaw, gathered in a large room at 6:30 a.m. as Larry Seifert, AT&T Wireless's chief operating officer, banged the gavel on the makeshift stock-market podium, which resembled the one in New York.

They cheered as a large television screen rendered the stock's upward moves and listened intently when Zeglis appeared on TV.

The catered, daylong event also featured comedian John Keister, a trivia contest and an employee conference call with the executives in New York. A number of employees went to the podium to share their favorite memories of "Project Angel," a fixed wireless service the company rolled out after six years of research and skepticism.

"It's been an exciting day," said Gerald Vanderwel, vice president of product line management. "People have worked hard for years for this day."

AT&T Wireless employees had other reasons to be festive, as they were invited to participate in the IPO at $29.50 a share. Unlike other high-flying IPOs of the past, where only high-level executives were allowed in on the early purchase, AT&T set aside 10 percent of the 360 million shares offered for all employees.

The IPO purchase had been the water cooler topic for sometime, they say, and many, if not all, used the four-hour allowable period Wednesday evening to confirm their trades.

Leading up to the IPO, employees had been instructed on how to purchase options.

Demand was heavy, and "everybody got what they asked for," said Denny Long, AT&T Wireless' director of people development.

Roger Yu's phone message number is 206-464-3119. His e-mail address is: ryu@seattletimes.com.