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.