Zeltiq Cuts the Fat on Its IPO

During the past week, the IPO market has been getting its groove back, with its latest deal — Zeltiq Aesthetics (NASDAQ:ZLTQ) — coming Wednesday. And on its first day of trading, Zeltiq knocked it out of the park, with ZLTQ shares jumping 19% to $15.50.

Zeltiq’s underwriters included JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS). But despite these top-notch Wall Street backers, the deal was fairly small — Zeltiq raised roughly $91 million in its offering. That was after the company had to reduce its pricing to $13 per share to gin up demand — the original range was for $14 to $16 per share.

So what does Zeltiq do? It developed a medical device called CoolSculpting, which helps to eliminate your “love handles.” The focus is on the inner thighs, back, chest and abdomen. CoolSculpting uses controlled cooling to kill fat cells. It’s actually a natural biological process called apoptosis, which does not cause scarring. The procedure takes 60 minutes and is painless. And the cost comes to about $1,600 per session. No doubt, this is attractive to physicians who are looking for new revenue sources.

Zeltiq’s growth has been rapid. For the first half of 2011, revenues spiked 379% to $32 million. Better yet, net loss fell from $8.5 million to $1.4 million. Thus, Zeltiq looks like it is on track to reach profitability within the next year.

More importantly, Zeltiq has much room for growth. The current installed base of CoolSculpting devices is at 629 units. According to its own estimates, Zeltiq thinks it can get this to 4,000 to 5,000 globally — however, the company currently doesn’t have a timetable for reaching these numbers.

But as a small-cap IPO, Zeltiq does look attractive. The company has a unique solution — which has FDA approval — and should benefit from the aging demographics in the U.S. And even with slow growth in the economy, there still are scores of wealthy baby boomers who want to get rid of some unsightly fat.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of �All About Short Selling� and �All About Commodities.� Follow him on Twitter at @ttaulli. As of this writing, he did not own a positioning any of the stocks named here