Investors gave a warm welcome Friday to Acacia Communications Inc., bidding up the Maynard telecom equipment maker’s shares following the company’s $103.5 million initial public offering.
The strong demand for Acacia shares was a rare bright spot for the tech IPO market — Acacia is just the second technology company to go public this year, and the first Massachusetts-based tech company to hold an IPO since last July.
Chief executive Raj Shanmugaraj said investors were impressed with Acacia’s technology and its growing profits, a rarity among fast-growing software companies that have fallen out of favor with Wall Street in recent months.
“It’s no more of the hype. It’s all about `show me the money,’” Shanmugaraj said Friday.
Acacia sold 4.5 million shares at $23 each on Thursday night, the top end of the range it was seeking. Share prices jumped to $29 by the time public trading opened Friday morning, and investor demand pushed the price as high as $31.94 in early trading.
The only other technology company to debut on Wall Street in 2016 is SecureWorks Corp., a cybersecurity company spun out in April by Dell Inc. And even after SecureWorks reduced the size and price of its initial offering, its shares have since been trading below its debut price.
Public tech stocks have lagged the broader stock market. The Nasdaq 100 Technology Sector Index is down more than 8 percent over the past year, compared to less than 2.5 percent for the S&P 500 index of large public companies.
Acacia, though, has something many other young tech companies are still aspiring to: profits. For 2015, Acacia said profits tripled to more than $40 million on sales of around $240 million.
The last Massachusetts tech company to go public was Rapid7 Inc., a digital security software vendor, in July 2015. Rapid7 shares have not traded above their $16 IPO price since December. By comparison, in 2014 four local tech companies went public: Care.com, Hubspot, Wayfair, and Imprivata.
Wall Street remains a little more interested in drug and health care companies, even though biotech stocks have also performed worse than the broader stock market in 2016. So far this year, five biopharma companies from Massachusetts have gone public, including two on the same day in early May.
Acacia’s products sit at the connection point between datacenters and the fiber optic networks that deliver data across the Internet. They help translate digital signals into the light pulses that travel over fiber optic lines, and reverse the process on the other end of the connection.
The company says its equipment can do that work faster than other devices, allowing telecommunications companies, cloud computing services, and Internet content providers to zip more information around the Internet without having to replace the actual fiber connections.
However, the company has a looming problem with one of its customers. Acacia has faced the loss of its largest customer, a telecom company in China, that was blacklisted earlier this year by the US government for allegedly trying to ship US-made goods to Iran. The Commerce Department said that it would require US suppliers to apply for an export license before shipping goods to ZTE, but said those licenses would generally be denied.
US officials granted the company, ZTE Kangxun Telecom Co. Ltd., a temporary reprieve from the trade sanctions in late March. But that reprieve expires at the end of June and there is no guarantee it will be extended, which could seriously hurt Acacia’s sales, the company said. ZTE accounted for 46 percent of Acacia’s sales in the first quarter.
The state awarded Acacia a $100,000 tax break in March after the company pledged to add 100 jobs during the next two years, part of an $8.7 million expansion plan that includes purchasing more manufacturing equipment. Acacia presently employs about 170.
Cambridge-based venture capital firm Matrix Partners is Acacia’s largest stockholder, with 39 percent of its shares. Acacia is led by chief executive Raj Shanmugaraj, who joined the company in 2010 after serving as a vice president at Alcatel-Lucent USA Inc.
Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.