Loudcloud, the Web infrastructure services company started by Netscape co-founder Marc Andreessen, priced Thursday at $6 per share after delaying its initial public offering and cutting its planned price.
Loudcloud raised $150 million by selling 25 million shares.
The company had reduced its projected price from a range of $8 to $10 per share, and upped the number of shares to be sold from 20 million. The stock will begin trading Friday under the ticker symbol "LDCL."
The company's decision to go ahead with its IPO in an unabashedly hostile market, even after ratcheting down expectations several times, is a clear sign that the company needs the money to fill in a steep cash burn, analysts said.
"They are really running on the thin edge," said Francis Gaskins, an analyst with Gaskins IPO Desktop, an IPO Web site. "There's no room for error at all."
Loudcloud is one of the most ambitious of a new breed of Net infrastructure providers offering to monitor and maintain all the technical functions of other companies' Web sites.
Launched with considerable hype in late 1999, it almost immediately ran into the market downdraft that has dragged even the biggest Net companies into financial turmoil.
The company has gained a string of big clients in recent weeks, announcing customers including AOL Time Warner, Ford Motor and Rupert Murdoch's Fox Web sites.
Despite these wins, analysts say the company's profit outlook is risky. The company is still at the point where it is spending more than it is taking in from customers, and Wall Street has not been comfortable that this will change in the future, analysts noted.
"It's clear that the institutions aren't buying (Loudcloud's) profit model," Gaskins said. "It's not clear that they have enough money to do what they want."
Loudcloud representatives declined to comment on the pricing, citing the quiet period mandated by the Securities and Exchange Commission.