Desktop Linux vendor Lindows Inc. has postponed its proposed initial public offering citing “current adverse market conditions”, having twice lowered the expected value of the offering in recent weeks.
The San Diego, California-based company, which is in the process of changing its name to Linspire following the settlement of a trademark infringement disagreement with Microsoft Corp., said it will continue to evaluate market conditions and may still proceed with the IPO at a later date.
Lindows won’t be forced into a cut-rate IPO by a fickle stock market. We are fortunate to have cash in the bank, and we owe it to our stockholders to wait until market conditions and public company valuations improve before we proceed with a public offering, said Michael Robertson, chairman and CEO in a statement.
The company announced in April that it intended to raise $57 million from its IPO, but later lowered that forecast in July to between $39.6 million and $48.4 million as it priced the 4.4 million shares at between $9 and $11. Earlier this month the company dropped its target again, slashing the price to a range of $7 to $9 per share.
Lindows is one of several companies to be hit by adverse market conditions, with internet search firm Google Inc. having dropped its price to between $85 and $95 per share, down from the $108 to $135 that it initially estimated.
However Lindows’ lack of historical financial performance figures could also be blamed for investor nervousness. The company was only founded in July 2001, making it difficult for potential investors to perform analysis of its financial figures filed with the SEC.
The company had revenue of $2.1 million in 2003, up from just $63,131 in 2002 but managed to reduce its net loss to $4.1 million for the full year ended December 31, 2003, from $6.7 million in 2002.