In a rare feat, Garmin (Nasdaq: GRMN) priced shares for an IPO Friday. The maker of global positioning system (GPS) devices priced 10.5 million common shares at $14 each.
The IPO market has been virtually dead for the past month, with most offerings withdrawing. Any company that makes it out the door has to have solid financials and a promising business.
The company turns a profit and has strong revenue growth; sales for the 9 months ended September 25, were $260.08 million in 2000, almost double $164.54 million in 1999.
Net income was a healthy $78.05 million, up from $43.58 million in the same period of 1999.
Risks to business include the dependence of Global Positioning System technology on radio frequency spectrum, a scarce commodity closely regulated by the Federal Communications Commission (FCC).
Garmin's current and future competitors include Telefon AB LM Ericsson (Nasdaq: ERICY), Motorola, (NYSE: MOT) and Nokia (NYSE: NOK) and Honeywell International (NYSE: HON).
Of the shares being sold, 7,875,000 are being sold by Garmin, while the remaining 2,625,000 are being sold by certain selling shareholders. Merrill Lynch and Credit Suisse First Boston are the lead underwriters, while Salomon Smith Barney is a co-manager.
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