NetGear Pulls IPO
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Humor isn't too different from investing as NetGear has learned -- both rely heavily on a sense of timing. But in this case, NetGear isn't laughing.
Santa Clara, Calif.-based NetGear Inc., a spinoff of communications equipment maker Nortel Networks, cited market conditions as it pulled its proposed $130 million IPO Wednesday.
The decision comes a day after networking bellwether, Cisco Systems, disappointed Wall Street for the first time in nearly 7 years, which in turn triggered a huge sell-off in all things networking.
NetGear, a provider of networking products for homes and small businesses and a unit of Bay Networks before Nortel acquired it in August 1998, has been operating independently since last May. It first filed for an IPO last September under the symbol NTGR. It updated the filing on Oct. 3, but never disclosed the number of shares it intended to float.
The proceeds from the offering would have been used to purchase inventory from a third-party logistics provider, settle inter-company loans and cover general corporate purposes.
Nortel holds a 68.6 percent stake in the company while Pequot Capital holds 18.5 percent and Shamrock Holdings has a 7 percent stake.
Robertson Stephens, UBS Warburg and Wit Soundview were handling the IPO.