Choice One Communications (Nasdaq: CWON) priced 7.145 million shares at $20 each, the high end of its raised range. The company had raised its range from $13-15 to $15-17 a share last week, before a final raise to $18-20 per share. Shares will trade Thursday.
The offering of shares in the provider of broadband data and voice telecommunications services is underwritten by Morgan Stanley, Lehman Brothers and Warburg Dillon Read. There will be over 29 million outstanding common shares after the initial public stock offering.
Though Morgan Stanley is at the helm, investors should be nervous about this deal, considering it's a "me too" offering, said David Menlow of IPOfinancial.com. Though it may still pop in its opening, it doesn't look promising in the long term, he added.
The company's financials didn't look promising either; for the year ended December 31, Choice One had a net loss of $32.5 million on revenue of $4.5 million.
Choice One provides broadband communications services in 2nd and 3rd tier markets in the Northeast. Its competitors include established telephone companies in its target markets, such as Bell Atlantic (NYSE: BEL), SNET and Ameritech, as well as competitive local exchange carriers with overlap in its targeted markets, such as Adelphia Business Solutions (Nasdaq: ABIZ), and Time Warner Telecom (Nasdaq: TWTC).