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Liquid Audio puts 3 million shares up for sale

Liquid Audio and a few of its shareholders file to sell up to 3 million shares of the company, according to a filing with the SEC.

Liquid Audio and a few of its shareholders filed to sell up to 3 million shares of the company, according to a filing with the Securities and Exchange Commission.

The Redwood City, Calif.-based company, which provides software and services for delivering music over the Internet, said of the 3 million shares offered, at least 2.1 million shares were being offered by Liquid Audio. The remaining 900,000 were being offered by shareholders, including the company's chief executive and its chief technical officer.

Liquid Audio is but one company in a crowded and hostile sector vying to have its technology format become a standard for downloading music. The company faces heavyweights such as AT&T Labs' a2b Music, Sony, Microsoft and IBM, among others.

Shares of Liquid Audio slipped 3.27 percent, or 1.25 points, to 37. The stock has traded as high as 49.25 and as low as 17.88 since the company went public in July.

The company plans to use the estimated $75 million raised from the sale of its shares for general corporate purposes, including working capital and capital expenditures, research and development, and hiring personnel.

After this offering, the company will have just more than 21 million shares outstanding.

If there is a strong demand for the stock, the company's underwriters have the option to purchase up to an additional 450,000 shares from Liquid Audio at the IPO price minus an underwriting discount. In this event, the company will raise about $91 million from the offering.

The offering is being managed by Lehman Brothers, Robertson Stephens, U.S. Bancorp Piper Jaffray, and Dain Rauscher Wessels.