Satellite company files for $86 million IPO
Cidera, a satellite content delivery company, files for an $86 million initial public stock offering, revealing significant new investments from MCI WorldCom, Dell Computer and PSINet in the process.
Cidera's pursuit of an IPO follows a similar thrust by competitor iBeam Broadcasting, which announced its plans to raise $170 million last month. Coupled with the stakes by the major communications, computer and Internet access companies, the move underscores the growing interest in satellite systems for certain Internet uses.
Formerly known as SkyCache, Cidera delivers streaming multimedia content for Internet service providers (ISPs) and Web hosting firms, speeding Net access by pushing Web content closer to users. Several firms such as high-flyer Akamai Technologies, Digital Island/Sandpiper Networks, Mirror Image and Adero offer similar services, though only iBeam, Edgix and SkyStream also employ satellites.
Some analysts have concerns about several proposed satellite-based consumer Net access plans, particularly after brilliant flameouts by satellite phone firms Iridium and ICO Global Communications. But by using satellites, which are capable of delivering information to many places simultaneously, Cidera, iBeam and others believe they can transport "rich media" at low costs.
"The one-to-many capability of satellites makes them good for streaming content," said Alex Benik, an industry analyst at The Yankee Group, a market research firm.
Cidera recently received $33.7 million in funding from a private placement involving MCI, Dell, PSINet and a European investment firm, the company revealed today in federal documents.
The company reported a pro forma net loss of $12.5 million, or $2.17 per share, on revenue of $358,000 for 1999.
Cidera plans to trade its shares under the "CIDR" ticker symbol on the Nasdaq stock market. Credit Suisse First Boston will serve as lead Underwriter, while investment banks DB Alex.Brown, Donaldson Lufkin & Jenrette and Robertson Stephens will act as co-managers for the offering.