Motricity (Nasdaq: MOTR) found a limited appetite from Wall Street for its IPO, but it decided to seal the deal anyway. The wireless technologies company completed its IPO by selling 5 million shares at $10 apiece.
That offering is a long shot from what Motricity had originally hoped it would fetch when it embarked on its IPO quest in January. Back then, the company hoped to raise as much as $250 million. It scaled back its ambition to about $85 million heading into this week, and ultimately settled for $50 million.
Before the IPO, Motricity kept a low profile in the Seattle-area tech community. It moved to Bellevue in late December 2007 when it acquired the mobile division of Infospace for $135 million. But ever since, the company has quietly been making an increasing impact in the wireless business. The company's mCore platform is now being used by four of the world's 10 biggest global wireless carriers, and provides customized access to the Web for 35 million people a month using wireless devices, as pointed out in an IPO preview story. Motricity generated $113 million in revenue a year ago and posted a loss of about $16 million.
The Motricity deal will create some new liquid assets for some prominent people. Advanced Equities was the company's biggest shareholder with a 28.6% stake heading into the deal, followed by billionaire investor Carl Icahn (13.8%), Technology Crossover Ventures (10%), and New Enterprise Associates (9.8%). Ryan Wuerch, 42, the company's chairman, CEO and founder, personally has 1.5 million shares, about a 4.8% stake, according to the prospectus. Motricity had 355 employees as of March 31.
As always, the true story of an IPO's success can't completely be written until some time passes. We'll have to watch whether the company's shares trade up or down today on the Nasdaq, and how it does next month, next year, and the next five years. But just watching how Motricity went through the wringer has got to make a lot of investment bankers and entrepreneurs pause for a while to see if they really want to go through with what can be a humbling ordeal.
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Luke Timmerman is the National Biotechnology Editor for Xconomy, and the Editor of Xconomy Seattle. You can email him at [email protected], or call 206-624-2374.
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