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Summary:

Motricity, which filed to raise up to $250 million in an IPO earlier this year, has now slashed its expected take from going public by more…

Motricity mCore Marketplace announced at CTIA 2010

Motricity, which filed to raise up to $250 million in an IPO earlier this year, has now slashed its expected take from going public by more than half. The move reinforces the view that while the IPO market has certainly loosened up compared to a year ago, it is still not easy-going.

All four companies in our realm that have priced their IPOs this year have cut the size of their offerings: ReachLocal ended up raising about $60 million last month, instead of up to $100 million; also in May, TeleNav (NSDQ: TNAV) raised $56 million instead of $75 million; and Quinstreet, which went public in February, raised $140 million instead of a hoped-for up to $250 million.

Motricity, which provides back-end infrastructure to wireless carriers, says in an SEC filing it expects to sell 6.75 million shares at between $14 and $16 per share, meaning it will likely raise between $95.5 million and $108 million.

  1. And that Motricity is a bit of a crap sandwich.

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  2. Laughable. Do they really “expect” to sell any shares at all? Funny how this is being reported in most of the media as sort of a done deal, rather than a last grasp at the cliff face as they fall into total failure.

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  3. Would I buy it? No. But Goldman Sachs is leading the IPO and they aren’t stupid. It’s a relatively small amount of shares and they will get sold at or near the target price.

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  4. Let’s not equate Goldman Sachs, or any other financial taking a company public, with stupid or smart. They are simply doing what they do, making a commission on the deal. They couldn’t care less if the company they take public is worthy of going public. It is just another deal to them. Anybody thinking it, “must be good because Goldman is doing it and they’re smart” is confusing the brand image of the banker with the financials of the company going public. As for Motricity … well … what was that growth driver again? Their profit margin was … what again?

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  5. The primary driver of this IPO is Wuerch’s need to get something done (IPO or acquisition) by July 25th. He leaves a lot of money on the table if a liquid event doesn’t happen.

    If you know Wuerch, you know that it is all about him, his ego, and his wallet. More about his incentive package here:
    http://localtechwire.com/business/local_tech_wire/opinion/blogpost/6877918/

    This has nothing to do with anything but Wuerch lining his own pocket. Period.

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  6. I think BigEgo is spot on. Just another example of a worthless board.

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  7. But see, that’s the thing. How can so many people have gotten into a situation where so much value is tied up in this guy? Look, people sank $400 million into this rattletrap over the past 10 years. What’s the nut on that by now? This is a value destroying black hole. And part of the question is who’s going to buy it? Just because Goldman’s selling doesn’t mean anyone’s going to buy. I mean, they’ve been trying to sell it for 6 months now, during one of the strongest equity rallies ever, and haven’t been able to do it. Just because they’ve announced a price cut and drastic pull back on the original ambitions doesn’t NECESSARILY mean that it’s primed for success…

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  8. I have to wonder if anyone buying this knows something I don’t.

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  9. Why are you wondering about something that’s NOT HAPPENING? No one is “buying this”, no one “knows something you don’t”. All Motricity has done is announced that they couldn’t sell it at their original price and they want a new price. This is not a done deal. It’s like when you try to sell your couch on Craigslist and have to keep posting it with a lower price. Doesn’t mean you’ve sold it or that anyone’s buying. Mean’s they’re NOT buying.

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  10. It is quite obvious that none of those commenting on Motricity know anything about the company nor are they astute investors. Companies like Goldman and JP Morgan don’t do IPOs for just anyone – they are very picky. If you look at who has backed this company, New Enterprise Associates (one of the top VC firms in the world), Carl Icahn (a very astute investor and a winner when it comes to money deals), etc. you will realize that Motricity is a potential very big deal. If you don’t want to invest in Motricity, then just shut up!!!

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