KPMG Consulting's Stock Rises 30 Percent on Opening Day

On its first day out of the gate, KPMG Consulting Inc. of McLean, Va., saw its share price rise 30 percent to close at $23.48 on heavy trading of its initial public offering of stock.In its Securities and Exchange Commission filings, KPMG had priced its stock at $18 a share. The price opened Feb. 8 at $20.44 and hit a high of $24.25. More than 89 million shares were traded.Most of the proceeds of the IPO will go to KPMG Consulting's former parent, the accounting firm KPMG International of New York and investor Cisco Systems Inc. of San Jose, Calif.The small proceeds for KPMG Consulting are not a concern, said William Loomis, manager director at the investment banking firm Legg Mason Wood Walker Inc. of Baltimore."Consulting firms tend to be cash-flow positive," he said. "If the company does well over the next year, there is nothing stopping it from doing a secondary offering to raise cash."KPMG Consulting is the first of the consulting arms of the Big Five accounting firms to become a public traded company. As such it is being closely watched, Loomis said. "They are definitely breaking the ice," he said.Accenture, formerly Andersen Consulting, Chicago, is planning to go public by the end of 2001, he said.KPMG Consulting had more than $2 billion in annual revenue. The company has more than 9,100 employees.