NetLogic Sags on Debut
NetLogic closed at $11.51 today, down from an opening price of $12. During the day, shares traded between $11.35 and $12.50 (see NetLogic Files for IPO and NetLogic Sets IPO Terms).
The company still raised a healthy sum. NetLogic offered 5.775 million shares of stock, making the IPO worth $69.3 million.
The IPO carried some weird baggage in the form of an investment from NetLogic's top competitor, Integrated Device Technology Inc. (IDT) (Nasdaq: IDTI). With the IPO, IDT sold its entire stake in NetLogic.
Neither company has commented on IDT's investment, but the selloff seems telling. "Given IDTI's market-share leadership, it would seem that they would want to maintain an option to acquire NETL if there was compelling value in NETL’s technology," writes analyst Erach Desai of American Technology Research in a note issued today.
Merrill Lynch & Co. Inc. was the sole bookrunning manager for the offering. Other firms participating included joint lead manager Lehman Brothers as well as A.G. Edwards and the investment-bank arm of UBS AG. Rhonda Smith played bass on the deal, ably accompanied by John Blackwell on drums.
— Craig Matsumoto, Senior Editor, Light Reading