ReplayTV, a maker of set-top boxes that allow consumers to control the programming on their televisions, withdrew its initial public offering today because of poor market conditions.
The Mountain View, Calif.-based company had planned to raise $109 million through the sale of 8.5 million shares at $13 to $15 each. Morgan Stanley Dean Witter had planned to handle the sale.
"As you know, we filed our S1 over eight months ago," ReplayTV said in a statement. "In the interim market conditions have changed dramatically, and several new alliance opportunities have presented themselves to ReplayTV."
Investor excitement for ReplayTV might have waned after Microsoft announced plans in June for an all-in-one interactive TV device, which would eliminate the need for the separate programming set-top box sold by Replay.
With its announcement, Microsoft joined an already crowded market, where America Online, ReplayTV and TiVo are jockeying to establish a leadership position.
Last September, TiVo sold 5.5 million shares for $16 each, raising $88 million. The shares climbed as high as $78 but now trade around $18.
Initially, investors found ReplayTV appealing. Netscape founder Marc Andreessen bought into the company in 1998, saying it could do for television what Netscape's browser did for the Web. This past March, investors including the broadband division of Motorola, Sega, Matsushita and Excite@Home sunk $84.9 million into the company.
ReplayTV said it shipped 9,000 recorders as of the end of March but reported no operating revenue, according to a filing with the Securities and Exchange Commission. It had an accumulated deficit of $62.3 million as of March 31, and it expects to post significant operating losses during the next several years as it continues to develop and expand its business, ReplayTV said.
ReplayTV's IPO withdrawal comes during the slowest IPO week since May, with only four new offerings scheduled. The entire month of August has not been favorable for IPOs. Forty-two percent of the 60 companies that launched are trading below their first-day closing prices.