Loudcloud IPO Fairly Quiet
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Marc Andreessen's much touted infrastructure play, Loudcloud (Nasdaq: LDCL), came quietly to market Friday after an initial offering of just $6 a share. The company had lowered the offering price twice prior to the IPO.
Shares were up just 28 cents on volume of 9.6 million shares in early afternoon trading.
Despite the less-than-stellar rise, some analysts expect the showing would have been even less if Netscape founder Andreessen hadn't been at the helm.
"Many didn't expect this to get priced," said Melanie Hase, an analyst at Renaissance Capital.
The fact that the company came to market at all under today's conditions may be a testament to Andreessen's celebrity-esque presence in the community. The company sold 25 million shares at the onset, raising roughly $150 million. Though this was down slightly from goals announced by the company on Monday to raise $160 to $200 million in the $8 to $10 range, it's a jump from the company's initial filing last year when it reported intent to sell only 10 million shares at $10 to $12.
Unfortunately, the lowered price offering means roughly one-third of Loudcloud is now in public hands. It also suggests one of the reasons Loudcloud came to market in today's environment is that it needs more money, not necessarily because it has a jubilant business model. On the flipside, underwriters Goldman, Sachs and Morgan Stanley Dean Witter have both issued reports that Loudcloud's path to profitability is clear in the coming quarters.
Whatever the outcome, Loudcloud's IPO was no Netscpae, which blitzkrieged onto the market in 1995 with a market cap that ballooned to over $2 billion.
Ahh...the glory days of summer's past.