Corvis Sets Price Range for IPO
Late Friday, Corvis Corp. http://www.corvis.com set the price range for its Initial Public Offering (IPO) at $13 to $15 per share, with 27.5 million shares expected to be offered to the public.
A specific date has not yet been set by the lead underwriter of the offering, Credit Suisse First Boston http://www.csfb.com. It's possible the offering will be completed in the next few weeks, depending on market conditions.
If the deal is priced at the high end of its range, it would raise $412.5 million for Corvis, which already has $200 million in cash in the bank. If the red-hot market for optical networking companies holds up, it's likely that shares would rise well beyond that range once they trade on the open market. The underwriters still have the opportunity to raise the price range before the IPO.
Corvis is the latest in a series of optical networking IPOs. On June 1, ONI Systems http://www.oni.com (Nasdaq: ONIS) was priced at $25, and shares tripled from that price in the first day of trading (see ONI Valued at $10 Billion in IPO).
According to Corvis' amended S-1 statement, filed Friday night with the U.S. Securities and Exchange Commission (SEC), 335 million shares of Corvis are expected to be outstanding after the offering. That gives the offering a $5 billion valuation in the current price range. If shares triple after the offering--as they did in the case of ONI--the public-market valuation of Corvis could reach $15 billion (see Doctor Huber's Revenge).
With Chairman, CEO, and President David Huber set to own 28 percent of outstanding shares after the offering, he will become a newly minted multibillionaire following the IPO.
--By R. Scott Raynovich, Executive Editor, Light Reading (http://www.lightreading.com