The Santa Clara, Calif.-based networking equipment maker hopes to raise $115 million in its second attempt at an IPO in two years, according to a filing made Thursday with the Securities and Exchange Commission (SEC). But questions remain about whether NetGear will have better luck going public this time around.
"It is still a little early to see if their financials will justify their valuation," said David Menlow, president of IPO Financial Network, a research firm.
Company representatives declined to comment on the filing, citing a quiet period.
In March 2000, networking giant Nortel. The privately held, independent spinoff then filed for an IPO in the fall of 2000, when it said it planned to raise $130 million. But market conditions led the company to withdraw the effort five months later, according to SEC filings.
The company, which makes Ethernet switches and other networking gear for homes and small offices, faces just as stiff a challenge this time around. Markets have plummeted even further. In addition, NetGear has encountered patches of product delays that resulted in lower-than-expected quarterly net revenue, according to its most recent SEC filing. It also recalled some of its Ethernet switches that were hit by a glitch with intermittent connectivity.
Despite the product delays, Ethernet switch recall and dour markets that create a major challenge to NetGear's IPO efforts, the company may win over some investors with its improved financial performance since 2000.
NetGear's revenue last year increased by 23 percent to $237 million, compared with the previous year. And the company posted a net profit of $8.1 million last year, compared with a net loss of $19.5 million a year earlier.
In the coming weeks and months, NetGear is expected to announce its IPO price-per-share range and the number of shares that it will offer--giving investors a better sense of the company's valuation. NetGear plans to trade under the ticker NTGR.