Motricity Is Latest Firm To Cut Size Of IPO

17 Comments

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.

17 Comments

about time ryan tasted some

and Icahn had to agree to purchase what a millon + shares just so the IPO would happen? Hey Ryan; hear that? It is karma calling…

none

Anyone who thinks the magic of Goldman can overcome the stink of Motricity should check out the Broadsoft IPO foisted clumsily by Goldman on its clients, just like Abacus. Priced at low end of range and nosediving from there. Crashing on entry, burning the rest of the way, marking the final close of Motricity’s last window.

Tim

I am watching a ComScore presentation now that shows a steady decline in usage from Q109 to current in areas that are important to Motricity. These are carrier deck sales of: ringtones, ringbacks, wallpapers, and applications/games.

Ken

Anyone who buys this stock is buying an idea that is at least 7 years old and way off the mark for 2010.

Michael

Ranting and railing about something you know nothing about clearly shows who is stupid! The $100M you speak of does not go to any of the investors who put up the $400M during the time it spent as a private company. Venture investors receive stock in the company which they can later sell to recover their original investment and any profits due to stock price increases. Do you really think Icahn lets his son dictate what he invests in? By the way, Mr. Icahn invested millions in the company and had a board seat (which he later relinquished along with several other board seats). I am quite confident that the investors will be well compensated for their support of the company,

none

The wonderful investors you tout are proven dumber than dumb just by the fact that, in the BEST case scenario now, they will only get back $100 million of the $400 million they sunk into this con. Less than 25 cents on the dollar. When those types of firms expect returns of at LEAST 20% per year! This is nothing but a disaster for everyone involved. And Goldman and JP Morgan will exactly do IPOs for “just anyone”, anyone at all, these days. If Motricity were worth IPOing, they would have pulled it off by now, and they wouldn’t have to prove themselves worthwhile by pointing to other organizations that have been foolish or desperate enough to get involved with them. Carl Icahn openly expressed his disappointment that his son, Brett, tricked him into investing in Motricity, and you can bet that whoever at NEA led their investment in Motricity is openly mocked there. You need to think for yourself, and not let Goldman, JP Morgan, the Icahns, NEA, or anyone else do your thinking for you. And isn’t it obvious by now that Goldman is VERY happy selling stuff it doesn’t believe in, such as the Abacus deal the SEC is suing them for? Is Motricity the next thing the SEC is going to sue them for?

Michael

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!!!

none

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.

none

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

none

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…

Mike

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

BigEgo

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.

Mike

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?

Shaden

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.

none

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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