The Wall Street Journal-20080215-ArcSight- MAKO Surgical Lose Ground After IPOs

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ArcSight, MAKO Surgical Lose Ground After IPOs

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The first new stock offerings of February didn't feel much love from investors yesterday, with software maker ArcSight Inc. and medical- device maker MAKO Surgical Corp. declining in late trading.

The initial public offering of ArcSight closed at $8.78 a share on the Nasdaq, down 2% from its $9 IPO price. It sold 6.9 million shares at the low end of its expected $9 to $11 price range, which was set by underwriter Morgan Stanley.

MAKO closed at $9.18 a share on the Nasdaq, down 8% from its IPO price of $10. It sold 5.1 million shares at the low end of a reduced $10 to $11 price range; it originally was expected to price between $14 to $16 through underwriters J.P. Morgan Chase & Co. and Morgan Stanley.

Based in Cupertino, Calif., ArcSight makes software that creates a kind of central command center for companies and government agencies to manage the security alarms and alerts generated by their networks. ArcSight's software helps sort and analyze the data to identify serious security threats or compliance issues.

With more than 400 customers, ArcSight has sold its software to a range of industries, including aerospace and defense, energy and utilities, financial services and more than 20 U.S. government agencies.

ArcSight, which introduced its first products in 2002, has never been profitable, and doesn't provide a prediction as to when it might be in the black.

Meanwhile, Fort Lauderdale, Fla.-based MAKO specializes in making robotic instruments and implants for knee surgery. Its products, which were first cleared by the Food and Drug Administration, allow surgeons to avoid complete joint replacement for early-to-mid-stage osteoarthritic knee disease, and instead resurfaces damaged joints and places implants through a small incision.

MAKO has never been profitable and expects to continue losing money as it develops its business.