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PointCast files for IPO
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May 14, 1998: 8:50 p.m. ET
'Push' pioneer to take 20 percent of firm public, hoping to raise $51.8M
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NEW YORK (CNNfn) - Internet "push broadcasting" pioneer PointCast Inc. on Thursday filed with the Securities and Exchange Commission for a $51.8 million initial public offering.
The offering, which represents 20 percent of the company, implies a total market value of nearly $260 million
PointCast plans to use the proceeds to increase its working capital and to pay for capital expenditures. In addition, the company said the funds might be used to acquire or invest in complementary businesses, services or products, although no acquisition discussions are underway.
PointCast specializes in the automated delivery of news and specialized content from a variety of partners to desktop computers through its special software.
The company plans to offer 4,312,500 shares at between $10 and $12 apiece through investment firms Lehman Brothers, BT Alex. Brown and BancAmerica Robertson Stephens.
PointCast lost $29.1 million in 1997 on revenues of $18 million compared to a loss of $15.1 million on revenues of $5.2 million in 1996.
The company also said it expects increased net losses for the next two quarters and sees significant losses for the foreseeable future.
Like many Internet-related companies, PointCast continues to lose money while expanding its operations and adding employees. PointCast has grown from less than 60 employees to 267 as of March.
The company also warned several of its core costs are expected to continue accelerating, including sales and marketing expenses.
"The company intends to substantially increase its operating expenses in order to increase brand awareness, increase its sales and marketing operations and continue to expand internationally.
It also warned that profits aren't a certainty down the road.
"There can be no assurance that revenue from advertisers or other sources will not decline in the future or that the Company's net losses will not continue to increase in the future or that the company will ever achieve or maintain profitability," PointCast said in its filing.
--by staff writer Cyrus Afzali
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PointCast
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