Shares in Transmeta double on Nasdaq

Shares in the chip maker Transmeta more than doubled as the Silicon Valley start-up started trading yesterday following an initial public offering of 10 per cent of its stock that raised $272m (£190m).

Shares in the chip maker Transmeta more than doubled as the Silicon Valley start-up started trading yesterday following an initial public offering of 10 per cent of its stock that raised $272m (£190m).

The company, whose backers include Microsoft's co-founder Paul Allen and the financier George Soros, produces the Crusoe chip, which uses software to perform many of the functions normally handled by tiny transistors.

Analysts hope the demand for the IPO will help break the drought of tech issues on Wall Street. Last month 35 companies shelved plans to go public, while the hi-tech Nasdaq index has slumped by almost one-fifth in the past two months.

Interest in Transmeta has been boosted by its high-profile investors and its developers, who include Linus Torvalds, the creator of the Linux operating system, and David Ditzel, an architect of Sun Microsystems' SPARC processor family. Sony, Gateway and venture capital firms, including Institutional Venture Partners, are also backing Transmeta.

The shares, priced on Monday night at $21, were up $21.50 at $42.50 in early afternoon trading on Nasdaq. Transmeta had sales of $3.46m in the quarter ended 30 September, the period it began selling Crusoe.

The chips consume far less power than those made by rivals such as Intel, allowing longer battery life. They can mimic microprocessor architectures, meaning that standard personal computer applications can run on Crusoe-powered notebooks and Net appliances and devices.

IBM said last week it had cancelled plans to use Crusoe in at least one of its laptops, but others, including Fujitsu, Hitachi and Sony, are already making laptops with Crusoe chips.