Spansion IPO prices at $12 a share
Increases offering to 42.2M shares from 39.2M
By MarketWatch
Last Update: 9:16 PM ET Dec. 15, 2005
SAN FRANCISCO (MarketWatch) -- Spansion Inc. Thursday evening had its initial public offering of 42.2 million shares priced at $12 each, raising $506.4 million.
The pricing came in below the expected range of $13 to $14 a share, which was lowered from a range of $16 to $18 a share earlier in the day. The offering of 42.2 million shares is up from an earlier proposal of 39.2 million shares.
Citigroup and CS First Boston led the deal's underwriting. Shares of Spansion, the flash memory chip unit spun off from Advanced Micro Devices Inc. , are due to start trading Friday on the Nasdaq under the ticker "SPSN".
The price reduction from Spansion, which makes flash memory chips, had already been expected by some, given the company's negative bottom line.
Through the nine months ended Sept. 25, Spansion reported operating losses of $257 million on revenue of $1.4 billion. That result compares with a profit of $6.9 million on revenue of $1.8 billion a year earlier.
Renaissance Capital noted that IPO investors have been picky this year overall as they sifted through deals that drew interest because of prospects for organic or cyclical growth.
Spansion is set to become the first publicly-traded U.S. company dedicated to making chips that use NOR flash technology.
The technology is widely used in cell phones, personal computers, TV set-top boxes and DVD players, but excess supply and falling prices have made the NOR flash market an unprofitable one for Spansion.
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For my part I´m looking at this as a 25% discount.
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