Pixelworks (Nasdaq: PXLW) moved higher Friday after pricing its initial public offering at 5.8 million shares at $10.
Pixelworks priced well below its original price range of $12 to $14, but had a respectable debut in a weak market. At midday, Pixelworks was up 2 1/16 to 12 1/16, or roughly 20 percent.
The company designs system-on-a-chip integrated circuits (ICs) that enable visual displays -- including Internet, video, and computer graphics -- on electronic systems such as PCs and TVs.
Like many companies going public, Pixelworks is racking up losses. Net loss for the year ended Dec. 31 was $4.9 million on sales of $12.8 million, compared to a loss of $1.6 million on sales of $978,000 in 1998. The company's accumulated deficit was about $22 million as of March 31, 2000.
Risks to the company's business include a limited number of large customers and distributors. In 1999 sales to Tokyo Electron Device Limited, its Japanese distributor, represented 55 percent of total revenue, and sales to MicroMax International Corporation, its Taiwanese distributor, comprised 24 percent.
Pixelworks' competitors include Genesis Microchip (Nasdaq: GNSS), Macronix International (Nasdaq: MXICY), Sage (Nasdaq: SAGI), Silicon Image (Nasdaq: SIMG) and STMicroelectronics (NYSE: STM). Potential competitors may include diversified semiconductor manufacturers such as Broadcom Corp. (Nasdaq: BRCM), National Semiconductor (NYSE: NSM) and Texas Instruments (NYSE: TXN).
Other IPOs on the calendar include:
The maker of semiconductors for wireless communications has a strong team of underwriters, led by Goldman Sachs, and co-managed by Chase H&Q and Donaldson Lufkin & Jenrette.
Security Capital is the deal's lead underwriter; Nutmeg Securities is a co-manager.