Adaptec (Nasdaq: ADPT) will put off an initial public offering for its Roxio subsidiary.
After market close Friday, Adaptec said it would postpone the IPO for Roxio to the first quarter of 2001 at the earliest. The company cited unfavorable market conditions.
The Nasdaq Composite Index has declined more than 28 percent since the U.S. Securities and Exchange Commission received Roxio's first filing on Sept. 26. Shares of Adaptec dropped more than 38 percent over the same period. Adaptec stock closed Friday at 11.75, up 0.8125 for the session.
Roxio sells software for storing and personalizing digital content on compact discs, as well as an application that lets PC users recover data losses from system crashes and other events. Unlike most would-be tech companies, Roxio is profitable; in the latest fiscal year ended in March, the company earned $5.2 million on revenue of $77.8 million. In the June quarter, Roxio earned $3.1 million as revenue nearly tripled year-over-year to $29.3 million.
The company cited a maximum of $57.5 million to be raised through the offering, although the total value of virtually all IPO registrations change between the time of the initial filing and the actual IPO.
Adaptec has said it will spin off its Roxio holdings to ADPT shareholders following the Roxio IPO.
Morgan Stanley Dean Witter is listed as the lead underwriter for Roxio's IPO, with assistance from U.S. Bancorp Piper Jaffray and Wit Soundview.>