RealNetworks launches hot IPO
Bucking the recent trend of lackluster receptions for tech IPOs, RealNetworks jumps out of the gate 55 percent higher than its offering price.
The company's stock jumped to 19-3/8 on the first trade of the day, and then eased back to end the day at 17-7/8, up 5-3/8, after pricing last night at 12-1/2. Just under 3.7 million shares traded hands.
Just yesterday, the stock's underwriters upped the offering range to $11 to $13, from a previous range of $9 to $11, according to the company's filings with the Securities and Exchange Commission.
The company generated $37.5 million when it presented 3 million shares of its common stock to the public this morning, based on an offering price of $12.50 per share.
The IPOs underwriters, Goldman Sachs, Montgomery Securities, and Robertson Stephens, set the price of $12.50 per share Thursday afternoon after the markets closed.
Following the offering, RealNetworks, formerly Progressive Networks, will have 27,688,155 shares outstanding, giving the company a market capitalization of $346.1 million, based on a $12.50 per share offering price.
This recent move to up the offering price range flies in the face of the poor showing tech IPOs have experienced of late.
For example, Software AG Americas, which launched its IPO yesterday, priced at $10 per share. Its initial range was $12 to $14 a share. SportsLine USA (SPLN) also had to revise its launch price downward, to $8 per share from its earlier range of $9 to $11 per share.
Since its inception, the company has offered its RealPlayer software to users free of charge in order to promote the adoption of its client software and to speed the mainstream acceptance of Internet multimedia.
However, the company derives a significant portion of its revenues from sales of RealPlayer Plus, an enhanced version of its free RealPlayer product. The company said in its filing with the SEC that its ability to continue to generate revenues from sales of RealPlayer Plus is, in large part, dependent on its ability to differentiate the RealPlayer Plus from its free product as well as from its competitors' free and for-sale player products.
The company said it intends to use the net proceeds from the sale of the common stock being sold in the IPO primarily for general corporate purposes, including working capital to fund anticipated operating losses and capital expenditures.
The company's streaming technology products enable the transmission and playback of continuous "streams" of multimedia content, such as audio and video, over the Internet and intranets. Among RealNetworks's products is RealSystem, which includes RealAudio and RealVideo.