In a sign of strong demand, Neutral Tandem, a provider of tandem interconnection services to telecommunications carriers, priced its offering of roughly 6.65 million shares at $14, above its proposed $11-$13 range. Although its addressable market is small, we believe investors are attracted to the company because it provides a critical service to its customers, has gained rapid adoption thanks to its first-mover's advantage and has built an attractive margin profile. Morgan Stanley and CIBC World Markets acted as joint book-running managers for the IPO, and the stock is expected to begin trading on the NASDAQ under the ticker symbol "TNDM" on Friday.
