Kraft Foods, the food arm of US tobacco conglomerate Philip Morris, has thwarted criticism of the high price of its initial public offering to raise US$8.7bn. The move makes it the largest publicly traded food stock in the US, and second in the world behind Swiss giant Nestlé.

Investor enthusiasm for the IPO shows that confidence in food stocks remains undaunted. Compared with hi-tech or Internet stocks, food companies may not be exciting but investors feel they remain a safe bet.

The IPO leaves Philip Morris with an 84% stake in Kraft Foods, although it retains 97.7% of voting stock and thus almost full control of its future. Analysts are speculating that the IPO may be the forerunner of a full-scale spin-off, but as yet there is no comment from the company.

To read a full, open-access feature on the IPO, please click here.