updated 12/17/2003 3:56:02 PM ET 2003-12-17T20:56:02

Orbitz Inc. made a roller-coaster debut as a publicly traded company Wednesday — its shares initially surging 18 percent and then falling back in heavy volume that underscored investors' revived interest in IPOs.

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The four-year-old Internet travel company, backed by the five biggest U.S. airlines, raised nearly $100 million from the initial public offering as it takes aim at its two larger competitors in the growing business: Expedia and Travelocity.

The company's stock, priced at $26 per share late Tuesday, began trading around midday on the Nasdaq Stock Market and jumped quickly to $30.75 before tumbling to $25.25. More than 13 million shares were bought and sold in the first hour and a half — nearly half as many as Nasdaq behemoth Microsoft — and the going price was back to the original $26 Wednesday afternoon.

Orbitz's IPO comes as investors warm up again to new offerings after many got burned in the dot-com bust. After a lengthy slow period for new issues, activity has been brisk since early October.

Almost half of the more than 50 companies that have gone public this year have been in the past two months, with more slated before year's end. The fourth quarter is expected to be the busiest period for IPOs since the end of 2000, according to IPOhome.com, a division of Renaissance Capital in Greenwich, Conn.

IPO activity still pales, however, in comparison to the dot-com days when they were snatched up by frenzied investors sensing a chance for quick profits. There were 480 offerings in 1999 and 406 in 2000.

Chicago-based Orbitz, which operates a Web site selling flights, lodging, rental cars and vacation packages, was started in February 2000 with airline investors American, Continental, Delta, Northwest and United. The carriers and Orbitz officials hold about 31 million shares, according to the company's filing with the Securities and Exchange Commission.

The initial public offering raised $316.7 million for Orbitz and its partners, and the company was valued at about $1 billion. Orbitz pegged its proceeds at $93.9 million, part of which it intends to put toward paying off debt.

Analysts say online travel is lucrative but there are substantial risks over the long haul, as evidenced by Orbitz's struggle to become profitable.

In the first nine months of 2003, Orbitz had a net loss of $1.4 million on revenue of $172.1 million, according to the SEC filing. Since its founding in February 2000 until the end of September, Orbitz said its losses, excluding one-time charges, have totaled $169.3 million.

However, it did post net income of $3.9 million in the third quarter, on revenues of $64.4 million, according to its prospectus.

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