Smart money is on MicroBatch

MicroBatch Ice Cream Corp., the brainchild of 1998 Wharton grad Jeremy Kraus went up for IPO on Tuesday. Those people searching for a "hot" new stock might not have found what they were looking for on Tuesday's initial public offering list for the Nasdaq SmallCap Market. The newest arrival to the list has to be kept in the freezer. Tuesday was the first day of public trading for shares of Jeremy's MicroBatch Ice Creams Inc., a company created three years ago by 1998 Wharton graduate Jeremy Kraus, 23. "It positions the company for national expansion very quickly, and even international expansion," Kraus said of the IPO yesterday. "It was the least dilutive financing mechanism for my shareholders." MicroBatch earned $7.2 million from the IPO, which offered 1.2 million shares at an initial price of $6. Shares of MicroBatch -- which trade under the symbol JMIC -- closed at $6.44 yesterday. For the nine-month period that ended September 30, MicroBatch saw $1.2 million in revenues. Market leader Ben and Jerry's, meanwhile, had revenues of $185.4 million. MicroBatch sells flavors with names like Revenge of Chocolate Overload, Vanilla Cream Stout and Purple Passion Pills. The cartons of ice cream are now available at about 5,000 locations in the Northeast. Kraus said he got the concept for MicroBatch ice cream from the "microbrew" process used by many popular beer companies. He called the IPO "a significant milestone for me personally," but said he was not surprised to have his company's shares being publicly traded only a few short years after its creation during his junior year in 1997. "It's always been part of the plan," he said, adding that the move will likely change the minds of people who previously doubted his ability to make MicroBatch succeed. "I'm confident that they're doubting less now." Finance Professor Jeremy Siegel, who was not specifically familiar with the MicroBatch IPO, said in recent years small start-up companies have gone public very quickly. "It would probably have been unusual five, 10 years ago," Siegel said. "With the ascent of the Internet economy, that has not been true any more." Small companies typically go public to raise capital to expand their business or increase production, he said. And increasing production is exactly what Kraus plans to do. "We're going to expand rapidly," he said, including the company's Internet operations from its Web site at www.microbatch.com. He won the Pennsylvania Young Entrepeneur of the Year award in 1997, and last year was featured in a 30-second Super Bowl commercial promoting his company after winning a competition for small businesses sponsored by Mail Boxes, Etc. Kraus, who concentrated in entrepreneur management in Wharton, originally financed his company with $70,000 worth of stock market earnings. Though Kraus' company is still based in West Philadelphia, MicroBatch ice cream is produced by a subcontractor in Aurora, Ill.