The confirmation that the IPO was a “hot issue” came Wednesday evening when the final offering terms were announced. Digital Theater priced 3.84 million shares at $17 each to raise $65.3 million. That was 28 percent higher than its original filing terms of 3.4 million shares at $14 to $16 each to raise $51 million.

Once again, the old Wall Street axiom came into play: “Increase a deal, double my order!”

The Digital Theater IPO closed its opening day at $24.92, up $7.92 a share from its initial offering price.

But this opening-day pop didn’t happen by itself. The IPO market does not swim against the tide. It needs a strong current at its back. And the Nasdaq Composite Index, the barometer of the IPO market, provided the strength.

The Nasdaq Composite, from its peak on March 10, 2000, at 5,048.62 to its trough on Oct. 9, 2002, at 1,114.11, had given up 77.9 percent of its value. Now that’s a great-granddaddy of a sell-off by anybody’s standards. Then the recovery set in. Its recovery high was set on July 9, 2003, at 1,747.46 -- up 56.9 percent from its low set exactly nine months earlier.

July 9 was the day bankers priced Digital Theater’s IPO.

The IPO market was showing more signs that it was heating up. Before the Digital Theater offering, only 12 companies had gone public this year. But their aftermarket performances have been sterling. By Wednesday’s close, 11 of the 12 closed that day above their initial offering prices. The other IPO finished on July 9 unchanged.

The average gain per 2003 IPO was up 36.6 percent each. That was somewhat better than the Nasdaq Composite. On July 9, 2003, the Nasdaq was up 30.9 percent from its Dec. 31, 2002, close of 1,335.51. This added fire to Wednesday’s IPO pricing.

(For subscribers, please note that the SCOOP ratings, or Street Consensus of Opening Premiums, for several IPOs have been increased.)

Accidents just don’t happen. Besides, as a company, Digital Theater has an interesting story.

Based in Agoura Hills, California, the company provides high-quality multi-channel audio technology, products and services for the entertainment industry. In 1993, Digital Theater’s first digital multi-channel audio soundtrack was created for Steven Spielberg’s “Jurassic Park.”

For the year ended Dec. 31, 2002, the company reported revenues of $41.1 million, up from $28.7 million for the year ended Dec. 31, 2001.

For the year ended Dec. 31, 2002, the company reported a net income of $4.4 million or 47 cents per share, up from $2.1 million or 23 cents per share for the year ended Dec. 31, 2001.

For the three months ended March 31, 2003, the company reported revenues of $11.7 million, up from $9.4 million for the three months ended March 31, 2002.

For the three months ended March 31, 2003, the company reported a net income of $1.6 million, or 15 cents per share, up from $1 million, or 11 cents per share, for the three months ended March 31, 2002.

The company was formed in 1990. As of June 30, 2003, Digital Theater Systems had 143 employees.

There is only one IPO scheduled for this week. But the new-issues calendar is starting to fill up.

This week’s offering is InterVideo (Nasdaq: IVII proposed). As a result of the strength in last week’s stock market and in the IPO market, InterVideo’s SCOOP rating has been increased to 3 Stars from 1 Star.