"Shares of the Santa Barbara, Calif.-based Internet advertising company closed at their offer price of $12 on Nasdaq. The price was at the low end of the company's projected range of $12 to $14 per share. Fastclick sold 5.6 million shares to raise $67.8 million."
"It looked to be a good deal,' said Ben Holmes, principal at Protege Funds, a Boulder, Colo., investment firm that focuses on IPOs. 'The color we were hearing was positive, the allocations were very small, everything looked to be in order. Then you get the bomb with the $12 pricing. It just came out of the blue."
"Fastclick has been profitable since 2001. Last year it reported net income of $5.1 million on revenue of $58 million, compared with net earnings of $5.8 million on sales of $28.7 million in 2003."
"The company last year raised $75 million in financing from a group that included Highland Capital Partners Inc., Oak Investment Partners LP and Steamboat Ventures, the private equity investment arm of Walt Disney Co. Both Lexington, Mass.-based Highland and Menlo Park, Calif.-based Oak Investment have 25.5% stakes in the company that, based on the offering price of $12 a share, value their holdings at $59.7 million. Burbank, Calif.-based Steamboat Ventures has a 3.6% stake valued at $8.5 million."
"Holmes said one factor that may have deterred investors from the offering was FastClick's January disclosure that the company paid co-founders Jeff Pryor and David Gross, $21.8 million and $10.4 million, respectively, in September in connection with the $75 million fundraising."
"You could say it was a total disappointment and didn't trade as well as we hoped,' Holmes said. 'But you can also say the deal came in at $12 and it is trading around $12.75 [in midday trade]. It's not a failure. The underwriters knew the book and priced the thing correctly; it just wasn't the hot piece of business we hoped for. "
[The Deal]
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