Bank of America took its merchant processing unit public last week, selling 32% of the subsidiary BA Merchant Services Inc.
The offering of 16 million shares raised nearly $205 million, and Bank of America said it expected to see a $145 million after-tax gain.
Shares priced at $15.50 were selling at midday Monday for $16.87.
David L. Menlow, president of IPO Financial Network in Springfield, N.J., said the merchant services subsidiary has been "on our hot list since it was registered, but we are cautious in light of deteriorating fundamentals."
Despite good underwriters, Mr. Menlow said, "we had rather see it come in the first quarter of 1997 rather than the last quarter of this year."
He added that BA Merchant Services could have gotten a better price in 1997 "when there might have been a greater after-market demand."
Several other prominent merchant processors have also gone public this year.
Bank of America is the fourth-largest merchant processor, with more than 90,000 merchants. It processed 321 million transactions in 1995 and 170.6 million during the first half of this year.
