PointCast pulls IPO
The push pioneer withdraws its plans to go public as it holds talks with media companies about a possible strategic alliance.
PointCast chief executive David Dorman declined to name the companies with which it is holding talks, but he noted it does extend beyond media companies.
According to sources, though, talks are being held with several media firms--talks that began in earnest shortly after Disney said it would buy a minority stake in Infoseek.
One of those media companies could end up taking a minority stake in PointCast. Some of the players coming to the table include suitors who previously had taken a look at the company, though some new suitors have emerged as well, one source said.
Some are interested in PointCast because it has not yet gone public and does not have the high valuations that some other Internet portals have encountered in the weeks following the Disney deal. Others are looking at PointCast purely in terms of whether it would be a good fit from a strategic point of view, said a source.
PointCast's technology, which broadcasts news, as well as corporate information, to users' desktops from such sources as CNN, has caught on much slower than expected. Many analysts thought PointCast missed a golden opportunity when Rupert Murdoch's News Corporation reportedly wanted to close a deal with the company last year. PointCast executives at the time declined to comment on any potential deal and Dorman, as well, declined comment on whether News Corporation is involved in these most recent talks.
One of the reasons often cited for the slow subscriber growth of PointCast is concern that its use will create congestion on corporate networks.
In May, PointCast announced plans to go public. In a regulatory filing, the company said it would have a proposed maximum offering of $51.75 million. The filing came earlier than many analysts had expected.
But several weeks ago, Dorman asked his technology team to think of ways beyond making the information delivery service work better and also to consider new uses for the technology.
This discussion hatched a hybrid strategy of personalization and a portal service, he said. PointCast began thinking of offering a set of personalized channels on a screensaver.
Then, two weeks ago, PointCast developed a working prototype of a portal concept and showed it to some potential customers. That kicked off interest in wanting to take discussions further, Dorman added.
But in order to hold partnership discussions without legal constraints, the company was obliged to request the withdrawal of its IPO registration statement with the SEC.
In yesterday's filing, the company said: "PointCast hereby applies to withdraw the above referenced registration statement, filed on May 14, 1998. The company has determined that it would be in its best interest to pursue other strategic alternatives at this time."
The document was signed by the company's chief financial officer and any questions were directed to the company's law firm, Wilson Sonsini Goodrich & Rosati.
The potential suitors have not been given a deadline to make a decision, Dorman said.
While no plans are in the works to make another run at an IPO in the short-term, that does not rule out the possibility to consider an IPO down the road, Dorman added without elaboration.
As reported by CNET NEWS.COM, PointCast was supposed to begin its road show--a traveling promotional presentation by which a company tries to attract investors to its IPO--in San Francisco this week, but now those plans have been canceled.