 | | June 17, 2010
The May Report: 6/17/2010: Bulletin: Motricity did not price last night but it may price tonight at $10 to $11 a share and at 5.9 million shares offered rather than 6.75 million shares; The Weinstein mystery is becoming less mysterious
Editor and publisher: ron@themayreport.com, ronaldmay@aol.com, www.themayreport.com , 773-525-3944.
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TABLE OF CONTENTS
The Scoop section:
-- Three articles on Motricity and the pricing
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[Editor's note: Ron May here. As I understand it, a new prospectus was filed last night for Motricity. Also, as I understand it, the leads on the booking, J. P. Morgan and Goldman Sachs, will close the books at 4pm today and then will figure out an exact price for the IPO. That could happen at 5pm tonight or midnight, but once they have a price, they will then show it to the company and the company will either accept or reject the offering. As it has been explained to me, the price difference is a reduction of about 30% from the midpoint of the $14 to $16 range which is $15 and the newly proposed range of $10 to $11 a share which is $10.50 a share. The new prospectus also reduces the number of shares being offered from 6.75 million to 5.9 million. I do not know enough about the pricing of previous rounds and the technical issues involved to know if the investors in previous rounds end up better of worse off. An IPO is just another round in many ways except it generally has a premium associated with it for the public market and there is of course liquidity.
I was going so crazy this morning in dialysis that Mike Novak, the social worker, took my cell phone away. I was talking so excitedly and loudly that other patients were complaining that they could not sleep. But my excitement was quite justified and understandable. An anonymous caller told me at about 10am that he thought yesterday's report was one of the best he has seen. And he said I am on the right track. And what track is that, exactly? Well, you just have to read yesterday's report if you missed it. http://tinyurl.com/2fucmy2
The answer lies behind door (or possibility) #3, my friends. One of the people I need to track down is Rick Shamberg who left town, I am told, after a very unfortunate car accident involving a Hugh Grant scenario with both David and Rick in the car. Shamberg left town, skedaddling for the lakes of MN, and Weinstein remained here, reinvented himself and ran the CEC. Did you know that my favorite pop is Diet Coke? But not today since I have the sniffles. And I have been bouncing off walls. Does anyone know how to reach Rick Shamberg or Melanie DeLeon --Mellons as we called her? Are you receivin' my meaning, oh my honorable friends? (A Clockwork Orange)
Much more to come on this, but we must be ware of the evil process server.]
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The Scoop section:
Three articles on Motricity and the pricing
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http://www.xconomy.com/seattle/2010/06/17/motricity-lowers-ipo-price-range-to-10-to-11/
Motricity Lowers IPO Price Range to $10 to $11
Luke Timmerman 6/17/10
Motricity's IPO isn't attracting the kind of interest the company had hoped for. The Bellevue, WA-based maker of wireless technology has cut its forecasted IPO price range.
Motricity (NASDAQ: MOTR) now hopes to price its initial shares at $10 to $11 each, down from an earlier goal of $14 to $16, according to Renaissance Capital. The company is also scaling back its ambition on the number of shares it plans to offer, bringing that down to 5.9 million shares, which means it could raise $62 million for its coffers, down from about $86 million that it was shooting for at the outset of this week. It's a long shot from the $250 million goal Motricity established when it first published its IPO prospectus back in January.
The company, which I wrote about on Monday, arrived on the local tech scene in late December 2007 when it acquired the mobile division of Infospace for $135 million. Motricity's mCore platform is now being used by four of the world's 10 biggest global wireless carriers, and provides customized access to the Web for 35 million people a month using wireless devices, according to the prospectus. Motricity generated $113 million in revenue a year ago, and had a net loss of $16 million.
Luke Timmerman is the National Biotechnology Editor for Xconomy, and the Editor of Xconomy Seattle. You can e-mail him at ltimmerman@xconomy.com, or call 206-624-2374.
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http://www.wirelessweek.com/News/2010/06/Business-Motricity-IPO-Price-Sinks-64-Economy/
Motricity IPO Price Sinks to $64 Million
Posted In: Economy | FirstNews
By Maisie Ramsay Thursday, June 17, 2010
Motriciy cut the price of its initial public offering for the second time in June, lowering its financial expectations to just a quarter its first IPO attempt in January.
According to documents filed with the FCC, Motricity now expects to make just $61.6 million on the deal after it cut the price of its shares to between $10 and $11. Including fees, the mobile content company could net $49.4 million from the offering.
Earlier this month, Motricity said it expected to make $101.3 million on the deal, which then priced its shares between $14 and $16. That price was less than half the $250 million Motricity expected to rake in when it first made a bid to go public in January.
Filings with the SEC show that Motricity has struggled to achieve profitability. Although the company narrowed its losses in the first quarter, it still lost $7.9 million on sales of $29 million. Last year the company lost $12.9 million on sales of $23.2 million.
Motricity's expertise lies in managed service technology that allows subscribers to access third-party content and applications. The company provides mobile data services to about 35 million mobile subscribers every month and has access to 200 million people through its carrier customers.
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http://moconews.net/article/419-the-man-behind-motricitys-250-million-ipo/
The Man Behind Motricity's $250 Million IPO & His Incentives
After promising an initial public offering for the past six years, Motricity has officially filed documents to raise up to $250 million through the public markets.
The man behind the deal is Ryan Wuerch, the founder and CEO of the Bellevue, Wash.-based company, who has been in the spotlight for better or for worse. While being very successful at raising hundreds of millions of dollars from investors, like billionaire Carl Icahn, he was highly criticized for his decision to buy InfoSpace (NSDQ: INSP) Mobile for $135 million in 2007. That acquisition brought out his harshest critics, who were enraged after he laid off most of the Motricity's employees; moved the headquarters from North Carolina to Bellevue; and ditched Motricity's core technology in favor of InfoSpace's. Still, today, it was likely the best decision for the the company given its reliance on its previous competitor's technology, clients and employees.
Now that Motricity has filed for an IPO, there's more information available on how the 42-year-old Wuerch managed the company from behind the scenes. We scoured the public filings to find his compensation package, which includes generous relocation benefits and incentives to either sell the company or have it go public in the next six months.
Wuerch has plenty of incentive in his employment agreement to either sell the company or have it go public by July 25:
-Salary: In 2009, Wuerch earned a salary of $365,000 and all other compensation of $73,000, which consisted of a stipend for cost of living adjustments for moving to the Seattle area. He will continue to get the adjustments until July 25, 2010 or the company's IPO (whichever comes first). The company said that while no executives received salary increases during 2009 because of the poor economy, Wuerch's salary will increase to $450,000 as soon as the company goes public.
-Motivation to go public: Wuerch entered into a new two-year employment agreement on Jan. 19, 2010. In 2010, he will have the chance to earn an additional 75 percent of his salary if the company hits certain financial thresholds. When the company IPOs, it will increase to 100% of his salary and it will be pro-rated from the date of the IPO.
-Motivation to sell: If Motricity is sold prior to either an IPO or July 25, Wuerch will receive a bonus. If the sale price is less than $300 million, he will receive a lump sum of $2 million. If it sells for more than $300 million, Wuerch will receive 1 percent of the value of the sale. (A $400 million-dollar sale will mean $4 million, etc.). In both circumstances, all of the company's equity must be sold.
Motricity is still paying the price for relocating the company to Bellevue:
-Relocation: Motricity purchased both Wuerch's house and Motricity's COO Jim Smith's house based on prices determined by a third-party company. Wuerch's house was appraised at $2 million and Smith's was worth $1.2 million. Under the arrangements, Motricity paid the mortgage and all costs associated with the homes, including taxes, insurance, utilities, maintenance, repairs and improvements, until they sold. In November, Smith's house sold for $950,000, and Wuerch's still is on the market.
-Wuerch's personal loans: As of November 2009, Wuerch owed $354,860 to Motricity based on loans from 2004 that were incurred as part of his move to North Carolina. In addition, Wuerch also borrowed $80,069 for legal fees. On Dec. 18, Wuerch wiped his debt of $434,929 clean by swapping out 332,007 shares of his vested common stock. These loans are no longer outstanding.
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END OF REPORT |