Stock Watch: One Day Later, Digital Island IPO Takes Off

Digital Island (Nasdaq: ISLD), which provides networking services for e-commerce businesses, went public on Tuesday with little-to-no fanfare. The offering priced at $10 a share -- the low end of its price range. The stock opened at 9-1/16 before recovering to close at 11-7/8. That's not a bad gain, but it's certainly nothing like what's been happening to many recent high-flying Internet initial public offerings.

On Wednesday, however, Digital Island stock started to fly. Shares of Digital Island closed up 6-1/16 to 17-15-/16 -- a gain of 51 percent -- on Wednesday after the company announced that payment-processing service provider PaymentNet had become a customer . That's certainly good news, but the timing of this announcement seems somewhat strange because the company is technically in a SEC-mandated quiet period.

It's uncertain whether this announcement an be considered a violation of the quiet period. Obviously, many investors don't seem to mind.