Investors partied like it was 1999 yesterday with the IPO of new issue JamdatMobile (NASDAQ:JMDT), a publisher of mobile games and wireless entertainment. Jamdat's stock spiked more than 50% from the opening price of $16, which was above the previous target of $13-$15 set by underwriters. The stock closed the day at $22.51 -- up more than 40%.

The red-hot reception of this issue by investors was predicted by many analysts and industry watchers. Private capital has been flooding into mobile content developers at a rapid rate recently, and individual investors have obviously been eager to dig into the mobile gaming market as well.

Since wireless networks have been upgraded over the last several years to support mobile devices with data capabilities, color screens, and multimedia functions, mobile gaming and entertainment has been a growing focus for investors. Wireless service providers have found that customers are willing to pay to have entertainment-related applications on their phone or PDA. For this reason, most market research points to a mobile entertainment market growing in excess of 50% annually for the rest of the decade.

So is Jamdat Mobile worthy of such attention? Does the mobile gaming market really hold that much potential for investors? From this Fool's perspective the answer is yes and yes. Does this mean you should sell the farm and jump on Jamdat? No, not yet anyway.

Foolish investors know that IPOs, especially ones that fly out of the gate, are bastions of hype and extreme volatility. At the current price, Jamdat is valued at roughly $440 million -- high expectations for a company that shows six-month revenues of just over $15 million. But Jamdat has substance; it has turned a nice profit of $1 million in the first six months of 2004 and revenues are growing exponentially.

Jamdat also has strong industry backing -- the venture funds of Qualcomm (NASDAQ:QCOM), Sun Microsystems (NASDAQ:SUNW), and Intel (NASDAQ:INTC) all own sizable portions. The company is also well connected with carrier partners such as VerizonWireless (NYSE:VZ) and Sprint PCS (NYSE:FON), only two of the 70 carriers offering Jamdat products globally.

The bottom line: It's very early in this market and Jamdat has many challenges ahead, so look before you leap. However, mobile entertainment is precisely the type of market and risk that David Gardner likes to look in for his Rule Breaker stocks. Investors eager to find the next 10-bagger should keep a close eye on Jamdat and this sector.

The first issue of David Gardner's new ultimate growth service, Motley Fool Rule Breakers , is now available. Take a free, no-obligation test drive today and see what his money is on.

Fool contributor Dave Mock is addicted to bowling on his mobile phone. He owns shares of Intel.