With the road show for institutional investors complete and the pricing date set for July 27, the long-waited IPO of optical networking company Corvis Corp. (proposed Nasdaq symbol: CORV) is coming closer to fruition.

Sources among institutional investors expect the price to be bumped up and the IPO to trade up at least 50 percent immediately following the IPO.

But Corvis isn't your average slam-dunk technology IPO. The company continues to remain secretive about its core technology, the capital structure includes a huge number of outstanding shares, and longtime rival Ciena recently filed an intellectual property suit against the company -- all of which adds intrigue to the deal.

Allowing for an over-allotment of shares, the company hopes to raise as much as $420 million dollars by issuing 27 million shares of stock in a price range of $13 to $15. Credit Suisse First Boston is the lead underwriter on the deal.

The shares being offered represent a very small slice of an enormous number of shares outstanding. At last count, 330.5 million shares of Corvis stock will be outstanding after the offering, according to the most recent amended S-1 statement filed on July 18. That's more shares than comparable companies that have been public since last year and have substantial revenues -- including Juniper Networks Inc. (Nasdaq: JNPR) (314 million shares outstanding) and Sycamore Networks Inc. (Nasdaq: SCMR) (244 million shares outstanding).

Corvis founder and CEO David Huber has held on to a large number of those shares. After the offering, Huber will own 28.3 percent of outstanding stock, while venture capitalist (VC) Kleiner Perkins Caufield Byers (Nasdaq: SCMR) will own 10.3 percent, Cisco Systems Inc. (Nasdaq: CSCO) will own 5.3 percent, and another VC, MeriTech Capital Partners, will own 5.3 percent.

Potential Corvis customers, three of which are testing the company's products, have an inside track on the IPO. In a private placement on May 2, Corvis sold 124,177 shares of Series H convertible preferred stock to Williams Communications Group (NYSE: WCG). This stock converts to 1,490,124 shares of Corvis common stock upon the IPO. On June 30, the company sold 372,533 shares of Series H convertible preferred stock to Broadwing Inc. (NYSE: BRW), which will convert into 4,470,396 shares of common stock. Williams and Broadwing each have the opportunity to purchase up to $5 million of common stock at the public offering price.

Corvis products have completed trials at Broadwing and Williams and are being tested at Qwest (see Corvis Completes First Field Trials), but the company has yet to realize any revenue from these deals. Corvis offers an "all-optical" switch with a long-haul reach of up to 3,200 km, which, if it works as promised, is on the cutting edge of optical technology. During the road show Huber said the switching fabric handles a capacity of approximately 2.7 terabits per second, according to one source, who asked to remain unnamed.

There is also a lingering matter of litigation between Corvis and Huber's former company, Ciena Corp. (Nasdaq: CIEN). Ciena announced -- during the Corvis road show -- that it was suing the company for violating Ciena's patents.

Citing quiet-period restrictions, Corvis official declined to comment on the lawsuit, referring inquiries on the topic to the S-1 statement.

The companies had been in litigation last year, over Ciena employees hired by Corvis. That suit was eventually settled.

--R. Scott Raynovich, Executive Editor, Light Reading, (http://www.lightreading.com)