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Cobalt Networks' IPO price climbs to $22

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Shares of Cobalt Networks, a maker of easy-to-use Linux-based server appliances, have been set at a price of $22 for the company's initial public offering.

Earlier today, Cobalt Networks raised the target price for shares in its initial public offering, saying it will market the stock for $20 to $22 apiece. The maker of server appliances had previously planned to sell the shares for $14 to $16 apiece.

Server appliances such as those Cobalt makes are special-purpose computers designed to do a particular task on a network--shuttling email or serving up Web pages, for example. Linux is a Unix-like operating system that many think is cutting into Microsoft's Windows NT sales, and one Linux seller, Red Hat, raised $84 million in its IPO in August.

Cobalt, based in Mountain View, California, disclosed the new price range in an amended registration statement filed with the Securities and Exchange Commission.

The IPO will consist of 5 million shares and give investors an 18 percent stake in Cobalt. If shares sell for $21 apiece, at the middle of the price range, Cobalt would raise $105 million and have a market value of $573 million, based on about 27.3 million shares to be outstanding.

Increasing the price of IPO shares indicates strong demand by institutional investors, who make up the bulk of purchasers in first-time stock sales.

An underwriting group led by Goldman, Sachs & Co. will market shares to the public. Cobalt will seek to trade on the Nasdaq Stock Market under the symbol "COBT."

News.com's Stephen Shankland contributed to this report.

Copyright 1999, Bloomberg L.P. All Rights Reserved.

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