Wall Street Goes Gaga Over Iwerks Offering : Entertainment: Stock price soars 86% as investors scramble to buy up shares in the movie theater technology firm.

Underscoring Wall Street’s love affair with multimedia, Burbank-based Iwerks Entertainment went public this week and on its very first day of trading the stock rose a staggering 86%.

The offering’s overwhelming popularity reflects the investment community’s enthusiasm for small entertainment technology stocks at a time when corporate giants such as cable operator Tele-Communications Inc. and Bell Atlantic Corp. are promising a new entertainment future based on technical progress.

Iwerks, one of the top designers of special-format movie theaters for theme parks and world expos, hopes to create the multimedia movie theater of the future.

Initially priced at $18 each when its 3 million shares were issued on Monday, Iwerks stock on Tuesday reached $37 in Nasdaq trading before closing at $33.50--a lofty 197 times the 17 cents a share the company earned in the fiscal year ended June 30. Most U.S. stocks sell for 15 to 25 times earnings.

“I do think it helped that the eyes of Wall Street are focused on our industry right now,” Iwerks Chief Executive Stan Kinsey said Tuesday. “There’s clearly an interest in the new media interactive technologies such as those that Iwerks is involved with. I’m a happy man.”

Hollywood too wants to make sure not to miss out on the new forms of entertainment and profit that technology may provide. Iwerks stockholders include Creative Artists Agency, which has more than 350,000 shares, and Itochu Corp., a minority stakeholder in Time Warner Entertainment, with more than 684,000 shares.

Iwerks is one of several multimedia firms to go public recently and meet with an ecstatic reception on Wall Street. Others include 3DO Co., Media Vision and Creative Technology.

But while many of these firms are aiming for the new markets that may--or may not--spring from interactive television, Iwerks has set its sights on creating a high-tech entertainment experience outside the home.

Founded in 1986 by former Walt Disney Co. executives Don Iwerks and Kinsey, Iwerks envisions a worldwide network of small-scale, urban-based entertainment centers containing giant-screen, 360-degree and simulation theaters with moving seats and interactive “virtual reality” games that use computer imagery to create artificial environments.

Iwerks’ ambitious plans have yet to be tested: the first of these complexes is to be installed at the Foxwoods casino in Ledyard, Conn. in December.