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Dallas, Oct. 29 (Bloomberg) -- Allied Riser Communications Corp., which builds fiber-optic networks in office buildings to provide high-speed Internet access, was little changed in its first day of trading.
The Dallas-based company rose 1/16 to 18 1/16. About 20.4 million shares changed hands. The company has a market value of about $1.11 billion.
Allied Riser operates its fiber-optic networks inside 61 office buildings across the country, and has agreements to install its networks in more than 1,000 buildings. The company says the networks offer always-on connections to the Internet at speeds up to 175 times faster than standard dial-up service.
The company is focused on providing its service to small and medium-sized businesses, which ``historically have been somewhat underserved by traditional carriers,' said David Crawford, 42, the company's chief executive.
Allied Riser's backers include Chicago billionaire Sam Zell and Goldman Sachs Group Inc.
The company sold 15.8 million shares at $18 each yesterday, raising $283.5 million. The transaction represented a stake of about 24 percent.
Allied Riser said it will use more than $175 million of the IPO proceeds from the offering to construct further networks, and the rest for purposes such as funding its operating losses.
The company, which began operating its first fiber-optic network in January 1998, had a loss of $19.5 million on sales of $547,000 during the six months ended June 30, up from a loss of $4.4 million on sales of $27,000 for the same period a year ago.
Allied Riser seeks to become part of the ``fabric of the community' in the buildings it wires, by offering high levels of customer service, Crawford said.
Crawford worked previously as a senior vice president at Equity Office Properties Trust and was counsel to Rosenberg & Liebentritt, a Chicago-based firm specializing in real estate and corporate law.
Allied Riser's technology chief is John H. Davis, 60, who previously held the same position at AT&T Communications Services. Davis conceived the architecture and managed the development of the No. 5 electronic switching system, ``which represents the core of today's public switched telephone system,' the company said in an earlier statement.
Allied Riser said it has severe price competition from companies including Cypress Communications, Onsite Access, Intermedia Communications Inc., CACI International Inc.'s Siteline, RCN Corp., Nextlink Communications Inc., Winstar Communications Inc., Teligent Inc. and Advanced Radio Telecom Corp.
``There are many competitors out there today,' Crawford said. ``We welcome that competition.'
The company also faces the prospect that competing high- speed Internet access technologies such as digital subscriber line technology, which improves the performance of ordinary copper-based telephone networks, cable modems, or wireless technologies, may reduce demand for its services, it said in its IPO filing with the U.S. Securities and Exchange Commission.
Allied Riser trades under the symbol ``ARCC' on the Nasdaq Stock Market. Goldman, Sachs & Co. handled the sale, with help from Merrill Lynch & Co., Donaldson, Lufkin & Jenrette Securities Corp., and Thomas Weisel Partners LLC.>> |
