Cashing In Its Chips

5:35 PM -- Mellanox inched closer to becoming the first storage company to go public in 2007 late Tuesday, when it set a target range for its IPO price of $12 to $14 per share.

It will likely have plenty of company by time the year is out.

The InfiniBand chip firm will likely price its shares and become a public company around the first week of February. And judging from the 2006 storage IPOs of Riverbed, CommVault, Double-Take, and Isilon, Mellanox will likely clock in near the high end of its range. (See Double-Take, Isilon Go Public, CommVault Swims in Public Pool, and Riverbed Comes Out at $9.75.)

Riverbed and Isilon had IPO prices above their target range, while CommVault and Double-Take hit the high end of their targets. If Mellanox hits $14, it would beat the IPO price of all but CommVault, which opened at $14.50.

But the firm Mellanox most wants to emulate is Riverbed, which opened at $9.75 in late September and hit a closing price of $32.47 today -- making its shares the highest priced of the new storage IPOs.Mellanox has something only CommVault had when it went public -- black ink on its ledger. (See Mellanox Ready for IPO .) Mellanox's latest filing shows a $3.4 million profit on $32.7 million in revenue for the first nine months of 2006, up from a $1.86 million profit on $29.9 million during the first nine months of 2005.

Like the previous IPOs, Mellanox's will be watched by a slew of other storage companies contemplating taking the plunge this year. Among the list of firms we know are eyeing the public markets are pure-play storage firms 3PAR, Arsenal Digital, Compellent, EqualLogic, and LeftHand Networks. Digital video storage startup Omneon has already filed for an IPO, and 10-Gbit/s Ethernet switch vendor Force10 Networks is expected to follow within months. (See Force10 Takes $51 Million and Omneon Preps for $115M IPO.)

Dave Raffo, News Editor, Byte and Switch