iBeam Broadcasting, (Nasdaq: IBEM) a provider of streaming media broadcast delivery services, priced 11 million shares at $10, the mid-point of its revised $9 to $11 range for trading Thursday.
iBeam originally filed to sell 10 million shares between $13 and $15, but trimmed its offering due to tough market conditions.
"It's a very small business, in the $100,000 in sales, but satellite distribution will draw investors' attention," said Kenan Pollack of IPO Central.
Like Akamai (Nasdaq: AKAM) and Inktomi (Nasdaq: INKT), iBeam is "offering the holy grail of the Web - to deliver content faster. The company's deal with Microsoft also gives its business the "golden seal" Pollack added.
iBeam is an Internet broadcast network delivers streaming media with viewing and listening quality that approaches television and radio. In order to bypass Internet congestion, iBeam transmits content by satellite to servers.
In addition to Microsoft, Sony (NYSE: SNE), Pacific Century CyberWorks, America Online (NYSE: AOL), Covad (Nasdaq: COVD) and Liberty Media (NYSE: LMGA) will own, in total, about 16 percent of the company upon the closing of this offering. Its customers include NBC and Time Warner (NYSE: TWX).
The company recorded an operating loss of $30.2 million for the year ended Dec 31 on revenue of just $149,000. Its accumulated deficit was $66.3 million as of March 31.
iBeam also said its business is dependant on its deals with AOL (NYSE: AOL) and Excite@Home (Nasdaq: ATHM), and it needs to spend at least another $15.0 million in capital expenditures to grow its business.
The company's competitors include Internet content distribution networks that accelerate delivery of web pages, such as Akamai, Enron Communications and Digital Island (Nasdaq: ISLD); Internet webcasting companies such as InterVu, which was recently bought by Akamai; Internet software such as Inktomi; Internet production and event services companies, such as Broadcast.com, which was acquired by Yahoo! (Nasdaq: YHOO), and satellite companies that deliver streaming video through satellite networks, such PanAmSat (Nasdaq: SPOT) and Cidera.
The deal's lead manager is Morgan Stanley Dean Witter, co-managers include Bear, Stearns & Co., J.P. Morgan, and FleetBoston Robertson Stephens.
The developer of video compression chips used for real-time video transmission to PCs is the fourth deal to price by WR Hambrecht's "dutch auction" system. The IPO process allows bidding to determine the offering price; other IPOs which have undergone process include Andover.net (acquired by VA Linux), Salon.com and Ravenswood Winery, none of which has fared particularly well since their debut.
For the year ended December 31, loss was $1.1 million on sales of $8.9 million, compared to a loss of $1.8 million on sales of $3.2 million.
The company has limited sources of revenue; sales rely on two products, its NT1003 and NT1004 chips, which amounted to 41 percent of sales in 1999, and 68 percent in the three months ended March 31. Nogatech's three customers accounted for about 51 percent of sales in 1999.
The company's competitors include Divio, SunPlus Technology and Winbond Electronics, which supplies chips to original equipment manufacturers. Nogatech said it also expects that large manufacturers of generic chips, such as Zoran (Nasdaq: ZRAN) and C-Cube Microsystems, may begin marketing competing chips.
• IPO Insider >