If all goes well, TeleNav, the Sunnyvale, Calif.-based mobile phone turn-by-turn navigation company, will be seeking between $89 to $105 million in its initial public offering next week.
Not only is it facing hard economic times for IPOs, TeleNav (NSDQ: TNAV) is heading into the big dance knowing that it will have to face difficult questions about increasing competition from both Google (NSDQ: GOOG) and Nokia (NYSE: NOK), which started giving away free navigation services since TeleNav filed its registration papers back in November. Scott Sweet, a senior managing partner at IPO Boutique, said four IPOs were canceled this week alone, and seven are scheduled for next week. “How do you fend off one of the most powerful stories in technology?…TeleNav has probably been hearing “Google” to the point of them getting sick.”
TeleNav, which will trade under the ticker symbol “TNAV,” will try to sell 7 million shares between $11 and $13 a share. That translates to between $77 and $91 million before fees. The underwriters include J.P. Morgan, Deutsche Bank, Robert Baird, Canaccord Adams, Piper Jaffray and Pacific Crest. The proposed trade date is May 13, according to Sweet.
In its filing, TeleNav acknowledged that both Google and Nokia are providing free turn-by-turn navigation features as part of their mobile operating system and phones. “If our wireless carrier partners can offer these LBS to their subscribers for free, they may elect to cease their relationships with us, alter or reduce the manner or extent to which they market or offer our services or require us to substantially reduce our subscription fees or pursue other business strategies that may not prove successful.” Currently, Sprint (NYSE: S) represents 55 percent of the company’s revenues and AT&T (NYSE: T) represents 34 percent of their revenues.
Despite looming questions about the company’s futures, its financial results are strong. In the nine months ended in March 2010, it made $30.8 million on revenues of $121.6 million. That’s nearly double from the year-ago period when it made $19.3 million on revenues of $76.6 million.