Flamboyant billionaire H. Ross Perot got another $876 million richer yesterday.
His computer services company, Perot Systems Corp., stormed Wall Street with an initial public offering that tripled in value in the first hour of frenzied trading.
The New York Stock Exchange had to halt morning trading twice for more than a half-hour due to the heavy demand for his stock.
Shares tripled to a high of 47 before settling at 43, or more than double the initial price of 16, a gain of 27.
Only 6.5 million shares were offered for sale, or 7.7 percent of the company, raising $104 million for Perot Systems. But by the end of the session roughly 10.9 million shares had traded hands.
Perot, 68, shares his holdings in the company with his 40-year-old son H. Ross Perot, Jr., a stake that soared to $1.38 billion at yesterday’s close from $504 million on Monday.
Analysts said investors were buying into Perot’s business reputation, not the Internet craze that’s pumped up computer-related stocks.
“Perot the man generated all the interest,” 028 . 0015.05said Ken Fleming, an analyst at Renaissance Capital Corp.”The Internet fever had nothing to do with it.”
Perot made world headlines by forming his own political party and becoming a candidate for president twice. But he backed off in 1992, citing threats on his family and a bag of 028 . 0002.01dirty tricks aligned against him by the powers-that-be.
Although he’s a champion of the political fringe (he once staged his own commando raid to free his employees from Iran), Perot has a strong following in the business world.
“He’s been very successful and people believe he’s 028 . 0002.01going to repeat his success with (Perot Systems Corp.),” Fleming said.
Perot made his fortune by building one of the world’s biggest computer- services companies, Electronic Data Systems Corp., which he sold to General Motors Corp. for $2.5 billion in 1984.
Perot and eight col028 . 0002.01leagues started Perot Systems in 1988 to compete against EDS, IBM and others. It’s grown rapidly to 6,000 employees, with revenue that could hit $1 billion this year.
While the company revolves around Perot, who runs it without collecting any compensation, analysts aren’t worried about secession.
“When he ran for political office he had strong management running the company, and he now has a very strong No. 2,” said Fleming, referring to Executive Vice President James Champy, a former chairman of Computer Sciences Corp.
Perot’s biggest client is UBS, the $600 billion Swiss banking group, which accounts for about 24 percent of Perot’s business. Most of UBS’s business is UBS’s investment bank Warburg Dillon Reed, one of the IPO’s underwriters.
UBS owns options to buy 6.4 million shares for $3.65 each, according to Securities and Exchange Commission filings.
Perot Systems earned $28.2 million in the nine months ended Sept. 30, up from $13.6 million the prior year, while revenue in the nine months totaled $724.2 million, up 30 percent.
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